21.5.11 Employee Plan Accounts

Manual Transmittal

June 19, 2018

Purpose

(1) This transmits revised IRM 21.5.11, Account Resolutions, Employee Plan Accounts.

Material Changes

(1) Made editorial and grammatical corrections throughout.

(2) IPU 18U0826 issued 05-17-2018 IRM 21.5.11.3.2 - Due date chart updated.

(3) IPU 18U0400 issued 03-06-2018 IRM 21.5.11.3.2 Added literals for GIA.

(4) IPU 18U0833 issued 05-18-2018 IRM 21.5.11.11 - Removed duplicate information.

(5) IPU 18U0874 issued 05-30-2018 IRM 21.5.11.23.4 - Add definer W to CCERTVU chart.

Effect on Other Documents

Supersedes IRM 21.5.11, Employee Plan Accounts dated July 1, 2017.

Audience

Wage and Investment (W&I) and Customer Account Services

Effective Date

(07-01-2018)

Sean E. O'Reilly
Acting Director, Business Systems Planning
Government Entity and Shared Services
Tax Exempt and Government Entities

Program Scope and Objectives

  1. The objective of this IRM is to:

    • Provide clear instructions and processing guidelines for Employee Plan (EP) Accounts Management Employees.

    • Eliminate the need for separate desk instructions.

  2. Audience - EP Accounts Management Employees, Ogden Campus.

  3. Policy Owner - Business Systems Planning (BSP) Director.

  4. Start to use any written instructions (e.g., desk procedures) to clarify the IRM 21.5.11, Employee Plan Accounts, once the TE/GE Processing Center Program Staff approves the instructions.

  5. Procedures in this IRM 21.5.11 coordinate with IRM procedures below which affect the TE/GE Employee Forms. The list below isn't all inclusive, but only an example of other IRMs.

    • IRM 21.1.3, Operational Guidelines Overview, contains specific instructions for handling disclosure issues and third party requests.

    • IRM 21.3, Taxpayer Contacts, contains specific instructions for initiating correspondence.

    • IRM 21.5.2, Adjustment Guidelines, provide instructions for processing all adjustments.

    • IRM 3.13.36, EPMF Account Numbers, contains specific instructions for EPMF Account Numbers.

    • IRM 3.30.123, Processing Timeliness: Cycles, Criteria and Critical Dates

Responsibilities

  1. All Employee Plan (EP) account related issues and correspondence are worked in the EP Accounts unit(s) or by Customer Service Representatives (CSR) located at Ogden Account Management Campus (OAMC). CSR and Tax Examiners (TE) located in other call sites or campuses don’t have authorization to resolve EP account related issues.

  2. Follow these procedures to process Employee Plan Master File (EPMF) penalty assessments. The Campus doesn't process Form 5500, Annual Return/Report of Employee Benefit Plan and Form 5500-SF, Annual Return/Report of Employee Benefit Plan Short Form.

    1. The Department of Labor (DOL) contracts a vendor to process and operate the Employee Retirement Income Security Act (ERISA) Filing Acceptance System (EFAST2) Project.

    2. Annually, more than one million pension, welfare and fringe benefit plans file the Form 5500, Form 5500-SF and Form 5500-EZ, Annual Return of One-Participant Retirement Plan, to satisfy annual reporting requirements under the Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code.

  3. A person from an employee plan requesting a copy of their Form 5500 must send the request to the Department of Labor at the following address:
    Public Disclosure, Room N-1513
    U.S. Department of Labor
    200 Constitution Avenue, NW
    Washington, DC 20210–1111

  4. Send public disclosure requests for Employee Plan Form 5500, series (except for Form 5500-EZ, to the Department of Labor at the address above.

  5. Forward requests for copies of Form 5500-EZ in response to an IRS notice to OAMC EP Accounts Mail Stop 6270:

    Note:

    Due to changing systems when the IRS took over the processing of the Form 5500-EZ, copies of Forms 5500-EZ filed before January 1, 2010, are unavailable.

  6. If the taxpayer requests copies of a form and the request isn't based on the issuance of a notice, send a letter telling the taxpayer they must file Form 4506, Request for Copy of Tax Return, and pay any applicable fee.

  7. Forms 5500, or Form 5500-SF, you receive as the result of IRS issuance of delinquency notices, Del-Assess notices, etc. that need to be processed as original (TC 150) or amended (TC 977) returns require electronic filing. Send the return back to the filer to file it electronically.

  8. Send Form 5500, or Form 5500-SF Secured Returns to EP Entity at Mail Stop 6273 to send back to the originator.

  9. Taxpayer Bill of Rights: In June of 2014 the IRS adopted the Taxpayer Bill of Rights (TBOR) therefore, consider these rights while carrying out your duties related to EP account related issues. For additional information refer to Policy 1-236 at http://irweb.irs.gov/AboutIRS/Nwsctr/OtherNws/52224.aspx and Taxpayer Bill of Rights (TBOR) - http://irweb.irs.gov/AboutIRS/tbor/default.aspx.

Program Controls

  1. OAMC management monitors recurring problems in the processing area and initiates Quality Analysis (appraisals) when appropriate. Notify the TE/GE BSP/SPP analyst who oversees the process of all quality analysis reviews, at Mail Stop 1110. The Quality Analysis should include examples and figures showing volumes and percentages.

  2. Report problems encountered meeting required time frames on the day of discovery to the TE/GE program analyst with oversight.

  3. Coordinate all problem EP Exam cases through the SPP analyst who oversees the EP Accounts Management process, POC for EP designated by EP Examination Office and the POC designated by W&I. This includes but isn't limited to:

    • TEGE secured returns processed incorrectly by campus.

    • TEGE secured returns posted incorrectly due to agent error.

    • Penalties assessed incorrectly on TEGE secured returns.

    • Payments incorrectly posted on TEGE secured returns.

  4. Use the following program codes to process EP filings and account actions:

    Program Code Use for
    72801 Form 5500, correspondence, assessments and abatements
    72802 854C EP replies

    Note:

    Disaster cases only. Route all other 854C EP replies to EP Appeals

    72804 All MFT 74 AMRH Transcripts worked via paper or through AMS.

    Note:

    Category Code AMRH

    72863 Reserved
    72864 All MFT 76 AMRH Transcripts worked via paper or through AMS.

    Note:

    Category Code EPAM

    72865 Form 5330, Return of Excise Taxes Related to Employee Benefit Plans, Amended/Dup returns & CP 193

    Note:

    Category Code EPDP

    72860 All other Form 5330 submissions

    Example:

    Form 5330 Claim for Refunds, EP cases sent to EP Agent.

    Note:

    Category Code TPRQ

    72867 Form 5330 - Reprocessing of returns/payments processed incorrectly by IRS

    Note:

    Category Code EPBS

Protection of Taxpayer/Filer Accounts

  1. The greatest potential for unauthorized disclosure of tax information occurs when handling telephone inquiries from filers.

  2. Be very careful to identify the filer or his/her authorized representative when answering inquiries.

    Note:

    Always verify CFINQ IDRS command code before disclosing tax information to someone other than the filer, by mail or phone.

  3. All items on Form 5500 Series Returns are disclosable to the public except Schedule E, and Schedule F. Schedules MB/SB are disclosable to the public except when attached to Form 5500-EZ.

  4. Forms 5330 aren't disclosable to the public.

  5. For Form 5500 penalties, research CFINK(P) or EMFOLE for valid CAF.

Third Party Disclosure and Request for Information

  1. See IRM 11.3, Disclosure of Official Information and IRM 21.1.3, Incoming and Outgoing Correspondence/Letters for issues regarding Disclosure, Third Party Request for Information, Freedom of Information Act request, Privacy Act, etc..

  2. Refer to your campus Disclosure Manager for specific questions about Disclosure and Central Authorization File (CAF), refer to your campus Disclosure Manager.

Employee Plan MasterFile (EPMF)

  1. Cases come from five sources of input processing:

    • Return processed by IRS before July 1, 2001.

    • Electronic Filing through EFAST.

    • Paper forms processed by EFAST.

    • Electronic Filing through EFAST2.

    • Return processed by IRS after January 1, 2010.

  2. Taxpayers must file all Forms 5500, and Form 5500-SF electronically. These returns are available electronically through the EFAST2 portal.

  3. OAMC EP Accounts processes requests for copies of Form 5500–EZ return information in response to an IRS notice. Copies of Form 5500-EZ filed before January 1, 2010 aren't available. Refer to IRM 3.5.20, Processing Rejects for Tax Return/Return Information, for additional information.

  4. Paper returns are coded with special codes for late and incomplete filing.

EPMF Forms and Schedules

  1. Form 5500 - Annual Return/Report of Employee Benefit Plan.

  2. Form 5500 - C –Return/Report of Employee Benefit Plan (with fewer than 100 participants) (Pre-EFAST only).

  3. Form 5500 - C/R –Return/Report of Employer Benefit Plan (with fewer than 100 participants). Form is obsolete, but process it if received.

  4. Form 5500 - R –Registration Statement of Employee Benefit Plan (with fewer than 100 participants) (Pre-EFAST only).

  5. Form 5500 - EZ – Annual Return of One-Participant Retirement Plans.

  6. Form 5500 - SF - Short Form Annual Return/Report of Employee Benefit Plan.

  7. Form 5330 - Return of Excise Taxes Related to Employee Benefit Plans. Process the Form 5330 as a BMF form.

  8. Form 8955-SSA - Annual Registration Statement Identifying Separated Participants with Deferred Vested Benefits.

  9. Schedule A - (Form 5500) – Insurance Information. Instructions for the 2005 revision reflects EBSA guidance on reporting of insurance fees and commissions.

  10. Schedule B - (Form 5500) – Actuarial Information. Changes to the 2005 form and instruction revision provide instructions on reporting investment returns, actuarial assumptions, and the summary of eligibility and benefit provisions used in plan valuations. Obsolete Plan Year 2008, replaced with Schedule MB & Schedule SB.

  11. Schedule C - (Form 5500) – Service Provider and Trustee Information.

  12. Schedule D - (Form 5500) – DFE/Participating Plan Information.

  13. Schedule E - (Form 5500 )– ESOP (Employee Stock Ownership Plan) Annual Information. Obsolete as of the 2009 plan year.

  14. Schedule G - (Form 5500) – Financial Schedules.

  15. Schedule H - (Form 5500) – Financial Information (Large Plan).

  16. Schedule I - (Form 5500) – Financial Information (Small Plan).

  17. Schedule MB - (From 5500) - Actuarial Information Multi-employer DB Plan and Money Purchase Plans.

    Note:

    Replaced Schedule B after 2008.

  18. Schedule P - (Form 5500) – Annual Return of Fiduciary of Employee Benefit Trust. Schedule P eliminated effective 2006 and later plan years.

  19. Schedule R - (Form 5500) – Retirement Plan Information. Changes to form 2005 revision modified Line 8 to identify plan amendments and decrease, as well as increase the value of benefits. Part IV of Schedule R includes plan coverage questions previously included on Schedule T, (no longer required).

  20. Schedule SSA - (Form 5500) – Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits.

  21. Schedule SB - (Form 5500) - Actuarial Information Single-employer DB Plan.

    Note:

    Replaced Schedule B after 2008.

  22. Schedule T - (Form 5500) – Pension Plan Coverage Information. 2005 version of Form 5500 Schedule T is no longer required. However, unless the plan meets one of the exceptions (see the instructions for Schedule R) the plan still needs to indicate whether the plan meets the ratio percentage or average benefit test.

  23. Quick Reference Chart for Form 5500, Schedules and Attachments, this chart provides only general guidance. Not all rules and requirements are reflected. Refer to specific Form 5500 instructions for complete information on filing requirements.

  24. Form 5500 - EZ filers for 2005 and later no longer need to attach any schedules to the form. Filers who request a timely extension must continue to attach the Form 5558 to a Form 5500-EZ filed after the normal due date. Filers subject to Schedules B and or P reporting should complete the schedule(s), retain a copy for their records, but not attach the schedule to a filed Form 5500-EZ.

  25. Form 5500, filer for 2005 and later no longer need to complete Schedule T. If the filer is subject to Schedule R reporting, Schedule R may reflect some information previously contained in Schedule T.

Due Date For Form 5500 Filings

  1. Taxpayers must file all Form 5500 series returns, except the Direct Filing Entity (DFE), on or before the last day of the seventh month following the close of the plan year unless we granted extensions. The figure below lists dates for Form 5500 Series Returns, except the DFE return:

    Figure 21.5.11-1

    Due Date Chart

    PLAN YEAR ENDING (PYE) Return Due Date F4868 Ext. Due Date F7004 Ext. Due Date F5558 Ext. Due Date
    201201 08-31-12 11-15-12 10-17-12 11-15-12
    201202 10-1-12 12-17-12 11-19-12 12-17-12
    201203 10-31-12 1-15-13 12-17-12 1-15-13
    201204 11-30-12 2-15-13 1-15-13 2-15-13
    201205 12-31-12 3-15-13 2-15-13 3-15-13
    201206 1-31-13 4-15-13 3-15-13 4-15-13
    201207 2-28-13 5-15-13 4-15-13 5-15-13
    201208 4-1-13 6-17-13 5-15-13 6-17-13
    201209 4-30-13 7-15-13 6-17-13 7-15-13
    201210 5-31-13 8-15-13 7-15-13 8-15-13
    201211 7-1-13 9-16-13 8-15-13 9-16-13
    201212 7-31-13 10-15-13 9-16-13 10-15-13
    201301 09-03-13 11-15-13 10-15-13 11–15–13
    201302 09-30-13 12-16-13 11-15-13 12-16-13
    201303 10-31-13 1-15-14 12-16-13 1-15-14
    201304 12-02-13 02-18-14 1-15-14 2-18-14
    201305 12-31-13 3-17-14 2-18-14 3-17-14
    201306 1-31-14 4-15-14 3-17-14 4-15-14
    201307 2-28-14 5-15-14 4-15-14 5-15-14
    201308 3-31-14 6-16-14 5-15-14 6-16-14
    201310 6-2-14 8-15-14 7-15-14 8-15-14
    201311 6-30-14 9-15-14 8-15-14 9-15-14
    201312 7-31-14 10-15-14 9-15-14 10-15-14
    201401 9-2-14 11-17-14 10-15-14 11-17-14
    201402 9-30-14 12-15-14 11-17-14 12-15-14
    201403 10-31-14 1-15-15 12-15-14 1-15-15
    201404 12-1-14 2-17-15 1-15-15 2-17-15
    201405 12-31-14 3-16-15 2-17-15 3-16-15
    201406 2-2-15 4-15-15 3-16-15 4-15-15
    201407 3-2-15 5-15-15 4-15-15 5-15-15
    201408 3-31-15 6-15-15 5-15-15 6-15-15
    201409 4-30-15 7-15-15 6-15-15 7-15-15
    201410 6-1-15 8-17-15 7-15-15 8-17-15
    201411 6-30-15 9-15-15 8-17-15 9-15-15
    201412 7-31-15 10-15-15 9-15-15 10-15-15
    201501 8-31-15 11-16-15 10-15-15 11-16-15
    201502 9-30-15 12-15-15 11-16-15 12-15-15
    201503 11-2-15 1-15-16 12-15-15 1-15-16
    201504 12-1-15 2-16-16 1-15-16 2-16-16
    201505 12-31-15 3-15-16 2-16-16 3-15-16
    201506 2-1-16 4-15-16 3-15-16 4-15-16
    201507 2-28-16 5-16-16 4-15-16 5-16-16
    201508 3-31-16 6-15-16 5-16-16 6-15-16
    201509 5-2-16 7-15-16 6-15-16 7-15-16
    201510 5-31-16 8-15-16 7-15-16 8-15-16
    201511 6-30-16 9-15-16 8-15-16 9-15-16
    201512 8-1-16 10-17-16 9-15-16 10-17-16
    201601 8-31-16 11-15-16 10-17-16 11-15-16
    201602 9-30-15 12-15-16 11-15-16 12-15-16
    201603 10-31-16 1-17-17 12-15-2016 1-17-17
    201604 11-30-16 2-15-17 1-17-17 2-15-17
    201605 1-2-17 3-15-17 2-15-17 3-15-17
    201606 1-31-17 4-17-17 3-15-17 4-17-17
    201607 2-28-17 5-15-17 4-17-17 5-15-17
    201608 3-31-17 6-15-17 5-15-17 6-15-17
    201609 5-1-17 7-17-17 6-15-17 7-17-17
    201610 5-31-17 8-15-17 7-17-17 8-15-17
    201611 6-30-17 9-15-17 8-15-17 9-15-17
    201612 7-31-17 10-16-17 9-15-17 10-16-17
    201701 8-31-17 11-15-17 10-16-17 11-15-17
    201702 10-2-17 12-15-17 11-15-17 12-15-17
    201703 10-31-17 1-16-18 12-15-17 1-16-18
    201704 11-30-17 2-15-18 1-16-18 2-15-18
    201705 1-2-18 3-15-18 2-15-18 3-15-18
    201706 1-31-18 4-16-18 3-15-18 4-16-18
    201707 2-28-18 5-15-18 4-16-18 5-15-18
    201708 4-2-18 6-15-18 5-15-18 6-15-18
    201709 4-30-18 7-16-18 6-15-18 7-16-18
    201710 5-31-18 8-15-18 7-16-18 8-15-18
    201711 6-2-18 9-17-18 8-15-18 9-17-18
    201712 7-31-18 10-15-18 9-17-18 10-15-18
  2. EPMF treats the extensions as follows:

    If Then
    Form 5558 Box is marked EPMF always ignores the Form 5558 box and instead looks for:
    • an approved TC 460 posted to the tax module.

    • an extended due date in the tax module set by a TC 460.

    Automatic Extension Box - Generate 5558 Extended Due Date This is for:
    • Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, the Information, and Other Returns

    • Form 2758, Application for Extension of Time to File Certain Excise, Income, Information, and Other Returns,

    • Form 8736, Application for Automatic Extension of Time to File U.S. Return for a Partnership, REMIC, or for Certain Trusts

    • Form 8800, Application for Additional Extension of Time to File U.S. Return for a Partnership, REMIC, or for Certain Trusts

    • Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, etc.

    DFVC Box EPMF won't generate any late filing penalty if the DFVC box is checked on original returns.
    Check amended Form 5500 for DFVC filings to remove assessed penalty.
    Form 5500-EZ filers can’t use the amended filing process if CP 283C delinquency notice has been issued. Refer to IRM 21.5.11.6.3.3.
  3. For penalty processing, the late penalty accumulates from the due date (or extended due date) to the received date at $25 per day.

  4. Form 7004, grants an automatic extension of six months for the filing of a corporate return and is sufficient for Form 5500 series and 8955-SSA returns. Beginning with the 2005 filing year, corporate and partnership calendar year filers, may now file Form 7004, to obtain an automatic six month extension. This extends the Form 5500 due date for both corporate and partnership returns to September 15th.

  5. Extensions granted on Form 5500 series also apply to the Form 8955-SSA for the same tax year.

  6. Form 4868, grants an automatic four month extension to file Form1040 series returns. This extends the Form 5500 due date for individual returns to October 15th.

  7. Taxpayers must file Direct Filing Entity (DFE) other than Group Insurance Arrangement (GIA) by nine and one-half months after the end of the DFE year.

  8. Form 5558, is for the sole purpose of requesting a one time, automatic two and one-half month extension. This one form extends the filing from the last day of the seventh month after the plan year ends until the 15th day of the third month after the normal due date. The Form 5558, generally doesn't require a signature, See IRM 3.11.20.2.17(1), Exempt Organization and Employee Plan Applications for Extension of Time to File.

    Example:

    A calendar year Form 5500 return is due July 31, but with the Form 5558 extension, the due date is October 15.

  9. Extensions are granted by using Extension of "Time to File Federal Income Tax Return" . Grant an automatic extension of time to file Form 5500, until the due date of the federal income tax return of the employer if the filer meets all of the following conditions:

    1. The plan year and the employer’s tax year are the same.

    2. We granted the employer an extension of time to file its federal income tax return to a date later than the normal due date for filing the Form 5500.

      Exception:

      IRS Form 8736

    3. A copy of the application for extension of time to file the federal income tax return is attached to the Form 5500.

      Note:

      An extension granted using this automatic extension procedure CAN'T be extended further by filing a Form 5558.

      Note:

      Form 7004, grants an automatic extension for six months after the corporate return due date and is sufficient for Form 5500 series return or Form 4868 grants an automatic six month extension to 1040 series filers, which would give EP 2 1/1 additional months.

  10. Exempt Organizations, filers of the Form 990 series returns, have an additional modification. Even though they're not federal income tax returns, if they use Form 8868 to request an extension for their 990 series return for six months (from May 15), this allows them until November 15 to file their Form 5500 series return.

  11. All fiscal return filers also follow these rules and examples. First establish their normal due date for filing their federal income tax (or Form 990 series) return. By using any other extension form other than Form 5558, add the number of months approved to their normal due date. If this extended date is beyond the normal due date of Form 5500 series returns, it's valid, as long as it met the valid conditions for the federal income tax (or Form 990 series) return.

    Note:

    Form 5558 can NEVER be used in addition to another extension form to gain more time. Whenever Form 5558 is used, don't consider any other extension form. Simply add 21/1 months to the normal 5500 series return due date and consider this the extended due date. If there is no Form 5558 attached to the return, or none is sent in response to any proposed penalty letter, research CC BMFOL/IMFOL for any other extension form that may be valid for the 5500 series return.

Transaction and Document Codes

  1. Form 5500 series return posts with Transaction Codes 150 and 977 (amended return) or TC 154 for Form 5330 fact of filing.

  2. Forms 5330 processes as a BMF return (MFT 76, Tax Class 4).

  3. The valid Document Codes (4th and 5th digits of DLN) are as follows:

    Figure 21.5.11-2

    Valid Document Codes

    Form Document Code MFT Transaction Codes
    Schedule SSA without primary return 36 NA 150, 155, 156. 977
    5500 and Fact of Filings 37 74 150, 155, 156, 976, 977
    5500 - C (Pre-EFAST only) 38 74 150, 155, 156, 976, 977
    5500 - EZ and Fact of Filings 31 74 150, 155, 156, 976, 977
    5500 - R (Pre-EFAST only) 30 74 150, 977, 155, 156, 976
    Form 5500-SF 32 74 150, 977, 155, 156, 976
    Form 3177 77 or 49 74 151, 420, 421, 424, 428, 474, 475, 930, 932
    Form 8955-SSA 33 75 240, 241, 290
    Examination (AIMS) 47 or 77   421, 424, 420, 300. 301
    Delinquent Tax Period 14 or 49   141, 142, 59X
    CAF Programs 77   960, 961, 962
    5330 35 76 154, 150, 460, 973
    Form 5558, Extension of Time to File a Form 5500 Series Return and Form 5330 04 or 77 74 or 76 460
  4. EPMF Delinquency Notice Transaction Codes (TC) are as follows:

    • TC 142 - Records the issuing of a Taxpayer Delinquency Investigation (TDI). Advise taxpayer to submit the missing return.

    • TC 155/156 - Received an incomplete return. The vendor issued a letter for the missing information.

  5. Denied and approved extensions for Forms 5500, and Form 8955-SSA, post to EPMF as a TC 460.

  6. Denied and approved extension forms post to the BMF as a TC 460 for Forms 5330.

Filing Requirements (FR)

  1. Active plan modules have a plan filing requirement as follows:

    1. T for Form 5500 - SF filed in lieu of a Form 5500.

    2. N is for one participant plans filing either Form 5500-EZ or Form 5500 - SF.

    3. X for Form 5500.

  2. When the latest return module doesn't contain an unreversed TC 150 or 977, but contains a TC 591, 593, 595, or 596, the plan filing requirement is blank.

  3. Other possible transactions and their results are:

    1. Latest return module contains a TC 150 or 977, not coded with CCC "F" (final return) and one of the following transactions: TC 591, 593, 595, or 596, the plan data module has a plan filing requirement and an entity filing requirement.

    2. Latest return module contains a TC 151, 591, 593, 595, or 596 and no TC 150 or 977, the plan filing requirements are blank and the entity filing requirements are zero (0).

    3. Latest return module contains a TC 150 or 977, coded with CCC "F" , assets distributed, and no participants are present, the plan filing requirements are blank and the entity filing requirements are zero (0).

    4. Latest return module contains a TC 150 or 977, coded with CCC "F" and one of the following transactions: TC 591, 593, 595, or 596, the plan filing requirements are blank and the entity filing requirements are zero (0).

    5. Latest return module contains a TC 150 or 977, not coded CCC "F" , the plan data module has a plan filing requirement and an entity filing requirement.

    6. Condition Code "F" , the plan filing requirements are blank and the entity filing requirements are zero (0).

    Note:

    The entity filing requirements contain a 1 for each type form present. If several plans have the same FR, the entity FR only reflects 1 for that type return. To post a TC 020 to the entity module, all plan filing requirements must be blank and the entity filing requirements must be zero (0) or eight (8).

  4. If no TC 150 has posted, a filing requirement will be present if a filing requirement is input on a TC 000 (Doc Code 64) TC 121 or TC 123.

  5. Plan filing requirements update by posting a return or inputting TC 016 (Doc Code 64).

  6. When a TC 020 (Doc Code 64) posts to the plan, the plan filing requirements change to 8 if an unreversed TC 12X or a return module is present.

    1. If there is no unreversed TC 12X or no return module present, the plan data module erases.

    2. Only a TC 012 (Doc Code 64) posts to a plan with filing requirement 8.

  7. To post a TC020 (doc Code 63) to delete the entity, all plan filing requirements must be blank or 8.

  8. Location Codes - These identify the Area Offices (AO) in which an entity is located, as determined by the mailing address. The computer assigns Location Codes to entity transactions containing a recognizable city and state.

Filing Requirements for Final Returns

  1. When the latest return module contains an unreversed TC 150 or 977 with Computer Condition Code (CCC) "F" (final return), the plan filing requirement are blank.

  2. CCC "F" generates on current year Forms 5500/5500-EZ if Return Process Code (RPC) "T" is present.

    Note:

    CCC "F" is input on "fact of filing" Forms 5500 if Part I, Line Item B(3) is checked "YES." Forms 5500-EZ if Part I, Line Item A(3) is checked "YES."

  3. The RPC "T" generates when:

    1. Schedule H/I Line 5a is answered "YES" , and

    2. Total end-of-year assets is zero, and

    3. Total participants end-of-year is zero.

      Note:

      RPC "T" generates on pure fringe benefit plans if Form 5500 Part I, Line Item B(3) is checked, and line 6 on the Schedule F is checked "YES," or "T" generates on pure fringe benefit plans.

Sequence of Accounts on the EPMF

  1. The accounts on the "EPMF" are maintained in EIN and Plan Number sequence (NNNNNNNNN–NNN).

Plan Number

  1. A plan number is a three digit number assigned by the plan sponsor to differentiate between plans established or maintained by the same plan sponsor, as the figure shows.

    Figure 21.5.11-3

    Plan Number Definitions

    If the plan is a Then the plan number starts with
    Pension Plan 001-500
    Welfare Plan 501-999
    Fringe Benefit Plan 501-999
    Form 5500-EZ 001-500
    Multiple Employer Plan
    Other Plan
    333-339 (Pre EFAST only)
    Direct Filing Entity - other than GIA 001-500
    GIA 501-999
  2. Once assigned, the same number must be used consistently to identify the same plan.

  3. If a plan terminates, don't use its number for any new plan.

  4. The plan number along with the plan name identifies a plan from other plans for a given sponsor.

  5. The plan name, plan number, the type of return filed, and the plan month ending make up the plan entity. As long as the plan is in effect the numbers stay the same although the name may change.

  6. If the Plan Number is 501–999 and a penalty generates on a true Fringe Benefit Plan, abate the penalty. If the Plan is a combination of fringe and welfare, the penalty is appropriate.

    Note:

    Per News Release IR-2003–89, pure fringe benefit plans have no IRS filing requirement and therefore shouldn't file a Form 5500, or a Schedule F.

Entity Changes

  1. EP Entity processes changes to the Name of Sponsor, Administrator or Plan, mergers of Sponsor or Plan, or changes to EIN. Adjustments can make address changes. Route the case to EP Entity via Form 12634, OIRSC Campus Document Transmittal, within 2 working days.

  2. Follow local procedures for making entity changes to non-master file.

  3. If you receive a copy of a return through contact with the filer, and you find that a return we originally processed posted to the incorrect EIN, Plan Number, or Tax Period, follow the instructions below.

    1. Edit the return by lining through the incorrect information and annotating the correct information above in blue or black permanent pen. Do not use black marker. Next to the correction edit an IRS identification code as follows: *OG (asterisk OG) with a circle around it, and send the return to Receipt and Control for shipment to EBSA.

Computer Condition Codes

  1. EFAST uses some of the same Computer Condition Codes (CCC) used in the current IRS system. Some new codes were added and some codes have different meanings when present on an EFAST return. Learn to recognize and use them, as required, in resolving delinquency notices.

  2. Computer Condition Codes (CCC) indicate exception conditions on a return. More than one CCC may be used on a return.

  3. A description of the valid CCC’s follows:

    Caution:

    Be aware that some Computer Condition Codes are used in different ways for different years.

    Figure 21.5.11-4

    Computer Code Definitions

    Computer Condition Code Definition
    A "(EFAST) Unperfected Schedule SSA." Generated when SSA edit tests are still unresolved after correspondence.
    B "(EFAST) Schedule MB/SB missing." Generated when Schedule MB/SB Edit tests are still unresolved after correspondence.

    Note:

    For processing year 2009 - Plan year 2008, no Schedule MB/SB penalties will be assessed. Effective July 1, 2009.

    C (EFAST & IRS) Substitute or secured return.
    D
    1. (EFAST) Damaged document received.

    2. (IRS) Input on 5500 series return when the filer begins and ends the Plan Year Ends (PYE) on the first day of the month, and Code & Edit or Error/Rejects edited the prior month for the PYE.

    E (EFAST) Entity Check Failed.
    F (EFAST & IRS) Final return. Input on fact-of-filing returns. Generated on current year's returns when all conditions for final returns are met.
    G (EFAST & IRS) Amended return. May be input or generates when amended return box is checked or when CCC "L" or "Q" is present.
    H (EFAST) Unperfected return for PBGC.
    I (EFAST & IRS) Incomplete return.
    J (IRS) bypass correspondence input on re-input returns.
    L (EFAST) Late reply to correspondence.
    N Late filed return with no extension of time to file.

    Note:

    Master File generates CCC N when a return is filed late. This CCC appears when using CC EMFOLT. It won't appear when using CC ERTVU.

    O (EFAST & IRS) One day (month) return—On Form 5500 series returns, it indicates that the plan begins and ends within the same month. It causes the return to post to the next month’s tax period.

    Example:

    If a one day return was filed showing December 30, 2014 to December 31, 2014, it will post as 201501 with CCC "O." CCC "S" will always be present with CCC "O."

    P (EFAST) Unperfected return for DOL/Joint items.
    Q
    1. (EFAST) EBSA referral. Input when DOL/EBSA receives a return or missing information that is entered on a return.

    2. (IRS) Input on returns referred from DOL/EBSA to IRS.

    R (EFAST & IRS) Reasonable cause for late filing is attached to the return.

    Note:

    Master File generates CCC R when an EFAST return’s REASONABLE-CAUSE-IND is significant. This CCC won't appear when using CC EMFOLT. It appears when using CC ERTVU.

    S (EFAST & IRS) Short period return—All returns—Generated when a plan year is 11 months or less because the plan is initial, terminated, merged or consolidated with another plan or changed its accounting period. CCC "S" allows the return to post even though the plan year ending month won't match the one already on the EPMF.
    U (IRS) input when essential information is missing and can't be secured through research (unprocessable).
    V (IRS) reasonable cause blank line items, input when the filer provides reasonable cause for line items being blank.
    X (IRS) reserved for future use on Form 5500-EZ.
    Y (EFAST & IRS) 52–53 week filer.

    Note:

    Multiple condition codes can post under the same TC Code.

Types of Employers or Sponsors

  1. The information provided below provides sufficient background information to determine if a response to a notice is proper.

    • Single-employer plan - Most common type where one employer adopts or establishes a plan for his/her employees. One return should be filed annually.

    • Plan of controlled group of corporations (or common control employers) - Plan generally considered one employer for reporting purposes. The filing requirement is based on how the plan operates.

    • Multi- employer Plan - Plan in which more than one employer participates, is collectively bargained (union agreement), and no employer contributes fifty percent or more of the annual contributions. Commonly known as a union plan. Set up and administered by the union.

    • Multi-employer-Collectively-Bargained-Plan - Same as above except that the plan doesn't satisfy the definition of a multi-employer plan. It has at least one employer who contributes fifty percent or more of the contributions to the plan so a new type or title is given to these plans.

    • Multiple-employer Plan (other) (Pre-EFAST Only) – Plan in which two or more unrelated employers participate in the same plan. None, or not all of the employers are members of a controlled group of corporations or are collectively bargained. If the contributions from each employer are available to pay benefits to all participants in the plan, one return is required to be filed for the plan as a whole (commingled funds). Very few plans are organized in this manner.

    • Group Insurance Arrangement a type of DFE – An arrangement proving benefits to the employees of two or more unrelated employers. The plan is fully insured and uses a trust to hold the assets. The administrator files only one annual return. If a consolidated report isn't filed, then each participating employer must file.

  2. The entity function ensures that all delinquent returns processed have the correct EIN, name control and plan number and makes all needed entity changes. Make all entity changes at the earliest possible time to update the master file.

    1. EPMF changes to the Employer/Sponsor name line, administrator entity data, plan name line, address and zip code process through IDRS. Input the appropriate transaction to update the EPMF entity if the filer indicates on the delinquency notice, "the name of the sponsor or administrator should be changed" . If there is an indication of an address change from a street address to a P.O. Box, change the mailing address to the P.O. Box and retain the street address as the location address unless there is already a location address present. Keeping the street address is provides an audit trail for locating the filer.

    2. If there is an indication of a plan name change indicated on the notice take special care to ensure that this isn't a different plan.

    3. Send the appropriate letter to notify the employer/sponsor that we changed our records to reflect their request.

      Exception:

      Don't input sponsor name changes, plan name change or administrator data changes from returns received as notice replies if a more current return already posted to the plan unless the filer specifically requests such a change in the reply.

Single-Employer Plan

  1. This is the most common type where one employer adopts or establishes a plan for employees. The employer may adopt multiple plans, each of which is considered a single employer plan.

  2. The administrator must file one return annually for each plan adopted.

    Example:

    XYZ Corporation adopts a fixed benefit plan and a profit sharing plan for its employees. The administrator must file two returns—one for the fixed benefit (defined benefit) plan and one for the profit sharing (defined contribution) plan.

Plan of Controlled Group of Corporations (or Common Control Employers)

  1. This is a plan adopted by a parent corporation and each of its subsidiary corporations or one adopted by brother/sister corporations. The filing requirement is based on how the plan operates.

  2. Originally the Form 5500 Series return instructions required a single return to be filed annually whenever the parent and subsidiary or brother/sister corporations adopted the same identical plan.

    1. This is still the case if all contributions to the plan made by the parent and subsidiary or brother/sister corporations are available to pay benefits to all participants of all the participating corporations. In other words, there is one pot of money and all employee participants are paid from this pot regardless which of the corporations made the contributions to the plan.

    Example:

    Parent Corporation (A) has subsidiaries B, C, and D. They all adopt the same plan and benefits are payable to all participants regardless of any one employer's contributions. The administrator must file one return annually (commingled funds).

  3. If the participating corporations designate contributions to the plan earmarked for the corporations, then each corporation operates as if it has a single employer plan. Each participating corporation must file a separate return.

    Example:

    Parent corporation (A) has subsidiaries B, C, and D which all adopt the same plan. But A, as well as B, C, and D, stipulate that their contributions are available only to pay benefits to their employees. Although this is a "controlled group" a separate return must be filed for A, B, C and D.

Multi-employer Plan

  1. This is a plan in which more than one employer participates, it's collectively bargained (union agreement), and no employer contributes 50% or more of the annual contributions. This is commonly known as a union plan set up and union administered. Each employer contributes a certain amount per employee (in a particular trade or business) to the union plan. One return is required to be filed for this plan. The "Board of Trustees" or similar group administering the union plan generally files the return.

    Example:

    A carpenter's union (W) establishes a plan for all carpenters in the union. Employers X, Y, and Z all employ carpenters who belong to W and agree to pay ten cents per hour for each hour worked by the carpenters to the union for its retirement plan. Although X, Y, and Z make the contributions to the plan, they aren't required to file a Form 5500 Series return. The administrators of union W plan must file a single return for the plan.

    Exception:

    Although most union plans operate as described above, the contributing employers may designate their contributions to be available to pay only their union employees. If this happens, don't treat them as a multi-employer plan; each employer must file a return.

Multiple-Employer - Collectively-Bargained Plan

  1. This is the same as above but the plan doesn't satisfy the definition of a "Multi-employer" plan. It has at least one employer who contributes fifty percent or more of the contributions to the plan so a new type or title had to be given to these plans.

Multiple-Employer Plan (Other) (Pre- EFAST Only)

  1. This is a plan in which two or more unrelated employers participate in the same plan. None, or not all of the employers are:

    • Members of a controlled group of corporations

    • Collectively bargained

  2. If the contributions from each employer are available to pay benefits to all participants in the plan, one return must be filed for the plan as a whole (commingled funds). Also, for pension plans (plan number 001–500), each participating employer must file a Form 5500–C/R using his own EIN and complete only certain line items. Very few plans are organized in this manner. Instead, each employer generally earmarks his/her contributions for only his/her participants so each participating employer must file a separate return as a single employer plan (not commingled funds). This is similar to the controlled group filing.

Multiple-Employer Plan (EFAST)

  1. This plan has more than one unrelated employer and isn't a multi-employer plan. The administrator files a Form 5500, for the plan as a whole. The administrator may need to attach Schedule R to report coverage information of participating employers.

Direct Filing Entity Plans (DFE)

  1. Group Insurance Arrangement (GIA) – This is an arrangement in which the plan provides benefits to the employees of two or more unrelated employers. The plan is fully insured and uses a trust to hold the assets. The administrator of the arrangement files only one annual return/report. If the administrator doesn’t file a consolidated report isn't filed, then each participating employer must file.

  2. Master Trust Investment Account (MTIA) – The administrator filing a Form 5500, for an employee benefit plan required to file or have a designee file a Form 5500 for each MTIA in which the plan participated at any time during the plan year. For reporting purposes, a "master trust" is a trust for which a regulated financial institution serves as trustee or custodian (regardless of whether such institution exercises discretionary authority or control with respect to the management of assets held in the trust), and holds assets of more than one plan sponsored by a single employer or by a group of employers under common control.

  3. Common/Collective Trust (CCT) and Pooled Separate Account (PSA) – The Form 5500 isn't required for a CCT or PSA. However, the administrator of a large plan or DFE that participated in a CCT or PSA that files is entitled to reporting relief not available to plans or DFEs participating in a CCT or PSA for which a Form 5500 isn't filed.

  4. 103–12 Investment Entity (103-12 IE) – This is DOL Regulation 2520.103–12 that provides an alternative method of reporting for plans that invest in an entity (other than a MTIA, CCT, or PSA), whose underlying assets include "plan assets" within the meaning of 29 CFR 2510.3–101 of two or more plans that aren't members of a "related group" of employee benefit plans.

EP Form 5500 Penalties

  1. Forms 5500, are subject to certain penalties for late filing and missing information.

  2. The Form 5500 penalties post to Business Master File.

  3. EP may be subject to various penalties when they fail to meet the established criteria set forth by the Internal Revenue Code.

Penalty Determinations

  1. Determine which penalty or combination of penalties is appropriate by reviewing the account as follows:

    Figure 21.5.11-5

    Definition of Computer Condition Codes

    Computer Condition Code Definition
    N Return is late
    I Return contains 1 or more incomplete items.
    I and N Return is both late and incomplete
    B Schedule MB/SB penalty. Penalty is always $1,000 in addition to the incomplete penalty.
    1, 2, 3, 4 or 6 Form 8955-SSA penalty. Information can be found on ERTVU.

Late Penalty Determination

  1. Forms 5500 and 5500-EZ are subject to late filing penalties.

  2. Review CC EMFOLT for an attached extension. If found and we received the return by an extended due date, close your case with the appropriate account action.

  3. The denied and approved extensions requests post to EPMF as a TC 460. A CP 216X notice generates to the filer.

  4. If the filer comes back in asking for reconsideration for his/her extension, and we approve his/her request, do the following actions:

    • Input a TC 460 with the approved extension date

    • Send Letter 333C.

      Note:

      Form 5558, listing EINs and/or plans is no longer accepted. If a filer submits a Form 5558 with a list of EINs and/or plans attached, and the extension wasn't previously accepted, don't input the TC 460. Notify the filer each plan must submit separate Form 5558s for additional EINs and plans.

  5. If the Plan Year Ending is 199809 - 200812, accept the filer’s statement that they submitted a timely extension or an attached copy of Form 5558 as a valid extension.

    Note:

    Form 5558 generally doesn't require a signature to be valid.

  6. Research BMFOL and IMFOL for a valid extension (TC 460) for either of these two situations to close your case with the appropriate account action. The TC 460 must have:

    1. The same tax period as your return.

    2. An extended date, or a number of months extended (1-6), that extends the EP return beyond the normal due date.

Incomplete Penalty Determination

  1. Review the return and if the results of the initial review resolve the incomplete items, close the account using the appropriate action.

    Note:

    Plan year 2008 has all Schedule MB/SB (B) penalties suppressed.

    Figure 21.5.11-6

    Incomplete Line Items

    INCOMPLETE LINE ITEMS
    Description 5500 5500 - EZ
    Return not signed for Plan Number 001–999 Page 1 Page 1
    Schedule MB/SB missing for Plan Numbers 001–500 Part II line 10(a)(3) Line 6(a) or (b)
    Actuary didn’t sign Schedule MB/SB for Plan Numbers 001–500 Schedule MB/SB, Part I in the middle of page 1 Schedule MB/SB, Part I in the middle of page 1
    Actuary Enrollment number missing for Plan Numbers 001–500. Must start with 02 or 05. If Schedule MB/SB is signed after 04/30/05, or if Scheduled MB/SB isn't signed and the return's postmark date is after 05/31/05 then the Actuary Enrollment Number must start with 05. Otherwise the Actuary Enrollment Number must start with 02. Schedule MB/SB, Part I, Item G Schedule MB/SB, Part I, Item G
    Amount to reduce funding deficiency isn't present for Plan Numbers 1–500. Schedule MB/SB, line 10 or 9p Schedule MB/SB, line 10 or 9p
    Schedule SSA incomplete (Plan year 2008 and prior) Schedule SSA page 2 line 4 (b), (c), (d) and (e). n/a
    Entry Code is missing (Plan year 2008 and prior) Schedule SSA line 4(a) n/a
    Type of pension benefit isn't known. (Plan year 2008 and prior) Schedule SSA line 4(d) n/a

    Note:

    Schedules aren't required for Form 5500 EZ after 2004 plan year.

  2. If one or more items from the chart above is still missing, the incomplete penalty is systemically assessed.

  3. If we receive a signed penalty abatement request for an unsigned Form 5500 or 5500-EZ, accept the signature on the penalty request and consider the return complete.

  4. If missing SCH-DB/MB is received in correspondence or in EFAST, accept and consider the return complete.

SSA Penalty (Plan year 2008 and Prior)

  1. If Code 1, 2 or 4 is shown, only the participants whose name and/or SSN is missing (as shown or circled in red or purple on copy of Form SSA) is included in the count of participants to be assessed. Examine the copy of the Form SSA via ERTVU to make this determination.

  2. If Code 3 is displayed, indicating a Form SSA was never attached, the penalty amount is the total number of separated participants shown on the transcript, times $1, times the number of days not sent. The number of participants comes from the line 7i, Form 5500.

  3. The system assesses the maximum penalty of $5,000 under IRC Section 6652(d)(1) if the following all occur:

    1. No "number of separated participants" is listed on line 7i described in IRM 21.5.11.5.4 (2) above.

    2. "Total participants at the end of plan year" are blank.

    3. The "Schedule SSA question" was answered "Yes."

  4. IRS has an obligation under ERISA to secure the correct information for SSA from the filer. DON'T USE THE SAME REASONABLE CAUSE CRITERIA FOR FORM 8955-SSA AS FOR THE RETURN. IT MUST BE STATED SEPARATELY.

    Example:

    The SSN(s) and Name(s) needed for the Schedule SSA must be available from the employment and unemployment returns filed with IRS. There are few, if any, reasons for them not to be available.

    Exception:

    If books and records were destroyed by an act of God or nature, and the SSA records couldn't be retrieved or recovered, reasonable cause criteria could apply.

  5. If foreign nationals are specifically shown on the Form SSA, assess no penalty for a missing SSN as they aren't required to get one. ITIN numbers are acceptable.

Other EP Penalties

  1. Examine the image of Form 5500, Annual Return/Report of Employee Benefit Plan, for the following questions/line items: (EFAST2 is available)

    1. Change in Administrator’s name, address or EIN (Part II, line 2a or 2b).

    2. Plan name change (Part II, line 1a).

    3. Schedule H/I Line 5a or 5b answered "YES" and CCC "F" present.

  2. The above items indicate that the plan name, the administrator's name and/or address changed, or a plan terminated, merged or consolidation occurred. If any change, or more than one, is indicated, the filer may be subject to a penalty. This penalty is referred to as the "Notification of change in status" penalty (IRC 6652(d)(2)). It is limited to $1000 per notification issue.

  3. If any of them are present and the return is late (CCC "N" is present without CCC "R" ), then the penalty is appropriate. This penalty is assessed in addition to the $25 a day penalty for being late. The amount is $1 per day for each of the four possible failures on any one return (no return can have the five issues). The four possible failures are:

    1. Plan Name Change

    2. Plan Administrator Change

    3. Termination

    4. Merge/Consolidation or division of plan into two or more plans.

    Example:

    If the Plan Name changed along with the Plan Administrator, the amount of $2 per day (for 2 of the 4 failures) would be assessed multiplied by the number of days (in this case the maximum number of days would be 500 days) until $1000 is reached (2 failures x $1 x 500 days = $1000). The $25 per day penalty at 500 days would be $12,500 at this point, but if the number of actual days was greater than 500, the $25 per day penalty continues until it reaches its own maximum of $15,000 (600 days).

Form 5500 Assessments

  1. Any incomplete item(s) or late return, have the penalty assessed.

    Note:

    The penalty assessed is calculated by the date of the submission or postmark date of the Form 5500 return.

  2. Current and prior year unsigned returns are subject to the incomplete penalty.

  3. Returns with transcripts that show both the CCC "N" and "I" were late and critical information was missing. The amount is the same, $25 per day, but examine the dates carefully. The late penalty is based on due date (or extended due date, see IRM 21.5.11.3.2 for extension discussion) to postmark date at $25 per day.

  4. If a Schedule MB/SB is unsigned or missing,it’s subject to both the $1000 penalty and the $25 per day penalty for every day it was unsigned.

    Note:

    For processing year 2009 - Plan year 2008, no Schedule MB/SB penalties are assessed.

  5. Actuary numbers are validated every three years. The valid Actuary Enrollment numbers are 02, 05, 08, 11 and 14. The latest cycle began April 1, 2014.

  6. The table below indicates the starting digits for Actuary Enrollment Numbers:

    If Schedule MB/SB signed: Or Schedule MB/SB is unsigned and the return's postmark is: The number must start with:
    Before April 30, 2005 Before May 5, 2005 02
    After April 30, 2005,
    Before April 30, 2008
    After May 5, 2005,
    Before May 5, 2008
    05
    After April 30, 2008
    Before April 30, 2011
    After May 5, 2008,
    Before May 5, 2011
    08
    After April 30, 2011,
    Before April 30, 2014
    After May 5, 2011,
    Before May 5, 2014
    11
    After April 30, 2014 After May 5, 2014 14
  7. If the Schedule SSA is missing, the filer is subject to the penalty for number of participants missing times the number of days and the $25 per day for being incomplete.

  8. As of January 2010, Form 5500, and 5500-SF filings must be filed electronically.

SSA Assessments

  1. The SSA is no longer a part of the Form 5500 filing. The Form 8955-SSA, is a separate return.

  2. Form 8955-SSA is subject to late and incomplete penalties.

  3. If an approved extension posts for a Form 5500, consider the Form 8955-SSA to have an approved extension also.

  4. Late or incomplete penalties assess systemically and issue a Late Filing Penalty Notice, CP 283C.

  5. To assess the Form 8955-SSA, late or incomplete penalty use the number of participants on the copy of Form 8955-SSA (these are usually filers with no name and/or SSN). Compute the number of days from the due date (or extended due date) to the assessment date. If it was a "No Reply," use the Adjustment’s "No Reply" date.

  6. If an assessment was made for a missing Form 8955-SSA, a partial abatement may be needed. The missing SSA number of participants may have been the entire number shown on the return. (See IRM 21.5.11.7).

  7. If an assessment was made for missing SSN/Name, compare the new copy with the one used for the previous assessment. Assess or abate any differences accordingly.

IRS/DOL Duplicate Assessments

  1. DOL may assess ERISA penalties on all returns.

  2. If it is also an IRS penalty, consider a request for abatement on the IRS assessment only. EMFOL shows CCC "I" , "B" , and "N" for IRS penalties. CCC "P" is for any DOL penalties.

    • Advise the filer that we eliminated the IRS assessed penalty, if appropriate. Also inform the filer that we are forwarding the DOL assessment to the DOL for their consideration.

    • Use the following address on Letter 86C.

    EBSA
    Office of Enforcement
    200 Constitution Avenue N.W.
    Washington, D.C. 20210

Form 5500 BMF Assessment Preparation - General Instructions

  1. Follow this section when processing adjustments to the MFT 74 account on BMF.

  2. If you need to make an adjustment on an account, see references throughout this section to different IRMs to help you complete your action.

  3. Adjustment guidelines are a set of IRS wide rules to follow when working the adjustments. Refer to IRM 21.5.2, Adjustment Guidelines, for additional clarification and procedures.

  4. For Reasonable Cause Criteria see IRM 20.1, Penalty Handbook.

  5. Notices are suppressed various ways depending on the type of notice and the issue. Notices are suppressed with:

    • Hold Codes

    • Notice Suppression Codes/Indicators

  6. Use command Code REQ54 to adjust tax, penalty, interest. When a REQ54 adjustment action completes and ADJ54 releases, assemble a source document record. Send the folder for association with the computer generated Form 5147 - IDRS Transaction Record, printout for filing. A source document is back-up material supporting the adjustment and kept for future reference. If interest is not restricted, interest will systemically adjust when tax and/or penalties are adjusted. No manual interest computation required.

Form 5500 Penalty - Correct Penalty
  1. Assessments for Form 5500 occur systemically and post to BMF.

  2. Any incomplete item(s) or late return filed has the penalty assessed.

  3. When the record is sent to BMF MFT 74 and the TC 240 posts, the CP 283Penalty Charged on Your Form 5500 Return, generates.

  4. If the assessment won't generate from EPMF to BMF, and one is needed, make a manual assessment. Refer to IRM 21.5.11.6.3.2, Employee Plan Accounts, for additional information on manual assessments.

    Note:

    If needed, correct the penalty for PRN 167 by computing from the return due date or extended date and compute separately PRN 169 for $1,000.

Form 5500 Penalty - Manual Assessment
  1. When needing a manual assessment, take the following steps on the account:

    • TC 290 for 0 on BMF via REQ54,

    • Input hold code"0"

    • The penalty amount that corresponds with the abstract for the assessment:
      IRC 6652(d) (1) = 165
      IRC 6652 (e) = 167
      IRC 6692 = 169

  2. Input of the TC 290 using the abstract amount posts as a TC 240.

  3. When the TC 240 posts, the CP 283 Notice generates.

Form 14704 - Manual Assessment
  1. EP Accounts receives Form 14704, Transmittal Schedule - Form 5500-EZ Filer Penalty Relief Program, from EP Entity.

  2. Form 14704, is used to request participation in the Form 5500-EZ Delinquent Voluntary Compliance Program (DFVC) .

  3. Input the following transactions when a Form 14704 is received

    • Input a TC 240 for the amount of payment indicated by EP Entity on the Form 14704.

    • Close the case.

Abatements/Adjustments on Form 5500/8955-SSA Accounts

  1. If the filer responds to the CP283 or 283C Form 5500 or Form 8955-SSA, balance due notice(s) with the requested information, you may need an abatement/adjustment.

  2. For the accounts assessed on BMF (MFT 74) all account actions take place on the BMF side, no account updates are on EPMF once assessed and posted to BMF.

  3. Use BMF blocking series (BS) to indicate the nature of an adjustment. See Document 6209, ADP & IDRS Information, for a list of BS used on account adjustments.

Abatements on Form 5500 BMF/8955-SSA Accounts

  1. After the CP 283 or CP 283-C balance due notice goes out, the filer may respond with the requested information. This includes any of the following:

    1. A copy of an approved extension.

    2. A copy of, or a statement that, he/she used an automatic extension (4868, 5558, 7004 or 2758).

    3. A reasonable cause statement that is valid according to IRM 20.1.

    4. The requested missing or incomplete information.

    5. Form 3870, Request for Adjustment, if the return is a Delinquent Secured Return or a Substitute for Return (SFR).

    6. Proof of filing a Form 5500-EZ and paying fee under Revenue Procedure 2015-32.

  2. If the filer provides required documentation to abate a penalty for MFT 74 (Form 5500) or MFT 75 (Form 8955-SSA), do the following :

    • Input via REQ 54, a TC 290 for .00 with the amount of penalty (minus) and abstract number. This action generates a TC 241 reversing the penalty amount.

    • Send a letter or notice to the filer notifying them of the penalty abatement.

  3. If a penalty is assessed for a Direct Filing Entity (DFE), abate the penalty using the steps in IRM 21.5.11.7.1 .

  4. If the filer responds stating the plan is a Puerto Rican plan and the plan benefits are exclusively for Puerto Rican residents (no U.S. participants are covered by the plan), abate the penalty.

  5. Use the following penalty reason codes:

    • 043 = DFVC

    • 044 = Missing information, wrong plan, year or EIN

    • 044 = Puerto Rican Plans

    • 044 = DFE

  6. If CC ERTVU shows reasonable cause, remove the penalty.

Unpostable 498 RC 2 MFT 74 Resolution

  1. EP Accounts researches and provides the valid plan number for association with the payment or refund check. EP Accounts provides the valid plan number as history on UPTIN or to the lead of the Unpostable Unit.

Form 3244 Payment Voucher

  1. When DOL receives a payment with a Form 5500/5500-SF, the DOL vendor forwards the payment to IRS. Deposit Activity prepares Form 3244. Deposit Activity numbers, batches and forwards the original Form 3244 to BMF as a (full paid) Form 5500 delinquency penalty assessment under Section 6652(e).

    • Review the return image, transcript, and Form 3244 to ensure the correct penalty assessment (including proper IRC section).

    • If additional penalties should be assessed, or if a portion should be abated, process according to existing instructions.

    • If the return is a Welfare Plan return (the plan number is 501–999 and Part II, line 10c isn't checked or Schedule F isn't present, which indicates a fringe benefit plan), refund any amount that was paid. IRS has no authority to collect or assess any penalty on Welfare Plans.

Form 2424 - Account Adjustment Voucher

  1. Use Form 2424, "Account Adjustment Voucher" , to transfer credits from MF to MF and MF to NMF. Prepare the form in duplicate with the credit copy as the original. For additional information refer to IRM 4.4.8Credit Transfers and Miscellaneous Adjustments.

  2. Transfer credits made available due to decreases of previously assessed tax using transaction codes 820 (debit) and 700 (credit). If allowable interest is available for transfer, use transaction codes 850 (debit) and 730 (credit).

Delinquent Filer Voluntary Compliance (DFVC)Payment

  1. EP Accounts occasionally receives payments intended for the Department of Labor for the DFVC program.

  2. If we receive a payment intended for the DFVC :

    • Refund the payment to the taxpayer.

    • Don't remove the penalty.

Routing Correspondence

  1. When any of the following forms: Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code,Form 1024, Application for Recognition of Exemption Under Section 501(a) or for Determination Under Section 120, Form 1028, Application for Recognition of Exemption, Form 5300, Nondiscrimination Requirements, Form 5305, Traditional Individual Retirement Trust Account, Form 5307, Application for Determination for Adopters of Master or Prototype or Volume Submitter Plans, Form 5309, Application for Determination of Employee Stock Ownership Plan, Form 5310, Application for Determination Upon Termination or Form 5310-A, Notice of Plan Merger or Consolidation, Spinoff, or Transfer of Plan Assets or Liabilities; Notice of Qualified Separate Lines of Business are attached to a return or correspondence, detach the application and send to:,

    CSPC
    P.O. Box 12192
    Covington, KY 41012–0192

  2. Return Pension Benefit Guaranty Corporation (PBGC) schedules (and attachments) to the following address:

    Pension Benefit Guaranty Corporation
    P.O. Box 64880
    Baltimore, MD 21264–4880

  3. Send applications shipped by express mail or a delivery service should be sent to :
    Internal Revenue Service
    Group 7521 Room 5106
    550 Main Street
    Cincinnati, OH 45202-5203
    Attn: Pre-approved Plans Coordinator

  4. Requests for Change in Plan/Trust Year—If an original Form 5308 with neither approval or disapproval is attached to the correspondence, send to the address in (4) above.

  5. If we receive an unprocessed amended Form 5500 series return and there’s no penalty abatement case, return to filer. All Form 5500 and Form 5500-SF must be filed electronically.

  6. If we receive correspondence in lieu of an amended return:

    • Research for a posted return.

    • If the research shows a CCC "N" or "I" , look for an open control base to which this correspondence belongs.

    • If an abatement is needed, follow the procedures in IRM 21.5.11.7, Abatement/Adjustments on Form 5500/8955-SSA Accounts.

  7. If we receive a loose schedule in correspondence and it doesn't pertain to a Account Management or TDI issue, use the following chart to determine proper disposition.

    Figure 21.5.11-7

    Routing Form 5500 Correspondence

    Received Route
    Responses to NC letters sent to filers requesting additional information EBSA/Vangent Inc.
    P.O. Box 7045
    Lawrence, KS 66044–7045
    Loose Schedules A, C, D, E, F, G, H, I, R, T for Form 5500 Destroy
    Loose Schedules B, for Form 5500 received from DOL vendor, EBSA or IRS Destroy
    Loose Schedules B for Form 5500 received directly from filer Return to filer
    Loose Schedules MB or SB, for Form 5500 received from DOL Vendor, EBSA or IRS Destroy
    Loose Schedules MB or SB for Form 5500 or Form 5500-SF received directly from filer Return to Filer
    Loose Schedule P for Form 5500 Destroy
    Loose Schedule SSA for Form 5500 or Form 8955-SSA Mail Stop 6054
    Form 5500 (received from Field Office, secured return) Return to originator
    Form 5500-EZ Send to Ogden Submission Processing to be processed
    Form 5500 (all others) Return to filer unless it is a copy addressing a penalty issue
    EIN request Entity control, Mail Stop 6273

Official Denied Form 5330/5500 Appeal Requests

  1. Send all official Form 5330/5500 denied appeal cases to EP Accounts to reconsider.

  2. If the penalty can't be abated upon reconsideration, the SME within the unit prepares the package and sends it to appeals.

Reasonable Cause General Guidelines

  1. Reasonable cause is based on all the facts and circumstances in each situation and allows the IRS to provide relief from a penalty that would otherwise be assessed. Generally, grant reasonable cause relief when the filer exercises ordinary business care and prudence in determining it’s filing obligations but is unable to comply with those obligations.

  2. Reasonable cause relief isn't available for all penalties. However, other exceptions may apply. For those penalties for which you can consider reasonable cause , consider any reason which establishes that the taxpayer exercised ordinary business care and prudence, but was unable to comply with a prescribed duty within the prescribed time.

  3. When considering the information provided, remember that an acceptable explanation isn't limited to those given in IRM 20.1.1, Introduction and Penalty Relief. Identify on either the closing or adjustment document penalty relief granted because the taxpayer provided an "other acceptable explanation" . The wording to describe reasonable cause explanations varies.

  4. Reasonable cause requires evidence that the filer acted in good faith or that the filer’s failure to comply with the law wasn't due to willful neglect. Filers have reasonable cause when their conduct justifies the non-assertion or abatement of a penalty.

  5. Judge each case based on its individual facts and circumstances at hand. Determine each case on its own merit. Consider ignorance of the law for reasonable cause only if other facts support this contention.

  6. Don't issue penalty abatement letters for EP customers referencing or stating "based on history of compliance" or similar wording. Do not make any reference to compliance history.

  7. Reasonable cause doesn't apply to interest abatement. See IRM 20.2.7, Abatement and Suspension of Debit Interest.

  8. Our approach to penalty administration must ensure:

    • Consistency - Apply penalties equally in similar situations. Filers base their perceptions about the fairness of the system on their own experience and the information they receive from the media and others. If we don't administer penalties uniformly (guided by the applicable statutes, regulations, and procedures), we jeopardize overall confidence in the tax system.

    • Accuracy - We must arrive at the correct penalty decision. Accuracy is essential. Erroneous penalty assessments and incorrect calculations confuse taxpayers and misrepresent our overall competency.

    • Impartiality - We're responsible for administering the penalty statutes in a fair and impartial manner to both the government and the filers.

    • Representation - Per Pub 1, Your Rights as a Taxpayer, we must give filers the opportunity to have their interest heard and be able to provide additional documentation for consideration. We need to take an active and objective role in case resolution and also ensure that we clearly communicate and honor taxpayer rights. Every function in the IRS has a role in proper penalty administration. Each function must conduct it's operations with an emphasis on protecting taxpayer rights and promoting voluntary compliance.

  9. Honor Form 3870, Request for Adjustment, as supporting documentation to abate penalties for EP Filings (Form 5500 series & Form 5330) for a Delinquent Secured Return or a Substitute for Return (SFR).

  10. See IRM 1.2.20.1.1, Policy Statements for Penalties and Interest Activities for more information regarding our policy on the use of penalties.

  11. See IRM 20.1.8 for more information regarding reasonable cause.

General Form 5330 Processing

  1. The following subsections contain instructions on processing Form 5330, Return of Excise Taxes Related to Employee Benefit Plans. Forms 5330 process to the BMF. Process Forms 5330 period ending before 198412 on NMF.

    Note:

    Don’t make new NMF assessments unless the return can't process to the BMF (e.g. quick assessments, period endings before 198412).

  2. Form 5330 reports tax on the following transactions:

    Figure 21.5.11-8

    Form 5330 Section and Definitions

    IRC Section Definition
    IRC 4971 Failure to meet minimum funding standards
    IRC 4971(b) Failure to correct minimum funding
    IRC 4971(f) Tax on failure to pay liquidity shortfall (Plan years beginning after December 31, 1995)
    IRC 4972 Nondeductible employer contributions to qualified plans
    IRC 4973 Excess contributions to IRC Section 403(b)(7)(A) custodial accounts
    IRC 4975 A prohibited transaction occurring after December 31, 1974
    IRC 4976 A disqualified benefit provided by funded welfare plans
    IRC 4977 Excess fringe benefits
    IRC 4978 and IRC 4978A Certain ESOP (Employee Stock Ownership Plan) dispositions
    IRC 4979 Excess contributions to plans with cash or deferred arrangements
    IRC 4979A Prohibited allocations of qualified securities by an ESOP
    IRC 4980 Reversion of qualified plan assets to employers
    IRC 4980F Tax on Failure to provide notice of significant reduction in future accruals
  3. Whether a Form 5330 is assessed on NMF or BMF, a TC 154 on the EPMF indicates that a Form 5330 was filed. This information is available from CC EMFOL. (Form 5330 processed before January 2001 should be available from ERTVU; others will be available from BRTVU).

  4. Abatement of tax is sometimes required on Form 5330 (exceptionerroneous IRS assessments).

  5. Find specific instructions for filing Form 5330 on the form itself and the Instructions for Form 5330.

  6. When Form 5330 needs to be re-input due to an IRS error, attach a Form 13133, Expedite Request, to the return before sending it for re-input. Expedite requests are processed on a 6 day cycle.

  7. See the figure below for Form 5330 due dates. For additional information refer to Form 5330 Instructions.

    Figure 21.5.11-9

    Form 5330 Due Date

    Form 5330 Due Dates
    Code
    Sect.
    Due Date
    4971(a) 7th month after the end of the employer’s tax year OR 8 1/1 months after the end of the plan year that ends with or within the tax year.
    4971(f) 7th month after the end of the employer’s tax year OR 81/1 months after the end of the plan year that ends with or within the tax year.
    4971(g)(2) 7th month after the end of the employer’s tax year OR 81/1 months after the end of the plan year that ends with or within the tax year.
    4971(g)(3) 7th month after the end of the employer’s tax year OR 81/1 months after the end of the plan year that ends with or within the tax year.
    4971(g)(4) 7th month after the end of the employer’s tax year OR 81/1 months after the end of the plan year that ends with or within the tax year.
    4972 7th month after the end of the tax year of the employer or other person who must file this return.
    4973 (a)(3) 7th month after the end of the tax year of the employer or other person who must file this return.
    4975 7th month after the end of the tax year of the employer or other person who must file this return.
    4976 7th month after the end of the tax year of the employer or other person who must file this return.
    4977 7th month after the end of the calendar year in which the excess fringe benefits were paid to your employees.
    4978 7th month after the end of the tax year of this employer or other person who must file this return.
    4979 15th month after the close of the plan year to which the excess contributions or excess aggregate contributions relate.
    4979A 7th month after the end of the tax year of the employer or other person who must file this return.
    4980 Month following the month in which the reversion occurred.
    4980F Month following the month in which the failure occurred.

    Note:

    If the filing due date falls on a Saturday, Sunday, or legal holiday, the return is due on the next business day.

Statute of Limitations

  1. Per IRM 20.2.5.2, Statutory Period for Assessment and Collection of Interest, we may assess and collect interest at any time during which the tax to which it relates may be collected. See IRC 6601(g).

  2. Generally, we must collect taxes assessed after November 5, 1990, within 10 years from the tax assessment date. Refer to IRM 25.6.1.12, Collection Statute Expiration (CSED), for additional information on CSED.

  3. With the exception of prohibited transactions, the statute of limitations (SOL) for assessment of taxes expires three years from the due date of the Form 5330 return or the date the return is filed, whichever is later. (See IRC 6501(a) ). A return is deemed filed on the due date of the return if filed on or before its due date.

  4. For Form 5330 filed for IRC 4975 excise tax, the three year statute of limitations for assessment of taxes commences running on the later of the date the related Form 5500 series return is filed or the date due, if the prohibited transaction is sufficiently disclosed (See IRC 6501(l)(1) ). See IRM 4.71.5, Employee Plans Examination of Returns, for help in computing statutes under IRC 4975.

  5. The statute of limitations for prohibited transactions extends to six years if the prohibited transaction isn't adequately disclosed.

  6. Other than prohibited transactions the statutory period for assessment of tax is six years from the date the return is filed or deemed filed, whichever is later, in cases of omission of more than 25% of the excise tax due under Subtitle D (Chapters 41 through 44).

  7. BMF automatically calculates a statute of limitations date for prohibited transactions three years from the later of the date the Form 5330 is filed or the due date. However, BMF currently incorrectly calculates the statute of limitations date for prohibited transactions, as there is no linkage to the Form 5500 series return statute date.

  8. See IRM 4.71.9, Statute Control Procedures, for additional information on statute dates for Form 5330s.

NMF Form 5330 Processing

  1. Most Forms 5330 are processed to the BMF. Quick assessments are processed to the NMF. Therefore, some claims for refunds and amended returns, must address the NMF if the original payment or assessment posted to the NMF.

  2. If filer claims a refund on Form 5330 as a result of the payment received with Form 5558 Extension, complete Form 1331-B with appropriate TC and route via Form 3210 to CSPC.

  3. Compare amended Forms 5330 with the original Form 5330, using CFOL where possible, and assess any additional taxes using Form 5734 (or Form 3354). Consider any remittance amount shown in the calculation. Include any interest and penalties that are appropriate. Be certain to use the TIN in Box B for the assessment. It could be either an SSN (for an individual), or an EIN (from a corporation, trust, partnership, exempt organization, or a pension/welfare plan). Handle any reductions in tax or request for refunds as an over assessment in accordance with IRM 21.5.11.7.

  4. Associate the amended return with the original assessment.

BMF Form 5330 Processing

  1. Forms 5330 are processed to BMF.

  2. The following section provides procedures for Forms 5330 processed to BMF.

  3. More than one Form 5330 can post to the same Tax Module. The first Form 5330 to post is a TC 150. All subsequent, non-amended Forms 5330 that post to the same EIN/Plan Number/Tax Period will post as a TC 973. The information from these returns is available on CC BMFOL.

  4. An amended Form 5330 must have all four of the elements below be identical. If any one of the elements is different process the return as a subsequent return, TC 973:

    • EIN

    • Period Ending

    • Plan Number

    • Abstract - Tax Section

  5. A true "dup" for a Form 5330 must have all five of the elements below be identical. If any one of the elements is different process the return as a subsequent return or an amended return. Refer to elements for an amended return above.

    • $ amount reported for Excise Tax

    • EIN

    • Period Ending

    • Plan Number

    • Abstract - Tax Section

  6. Adjustments receives the following:

    1. CP 186, Notification of a potential manual interest or penalty adjustment.

    2. CP 190, Generated within four cycles after a coded TC 976 posts to a module which doesn't contain an original return (TC 150).

    3. CP 193, Duplicated Filing Notice.

    4. Late replies to correspondence for missing items which may require abatement of taxes and penalties.

    5. Replies to Balance Due Notices.

    6. Claims for Refunds.

  7. Don't correspond to the filer for supporting documentation that may be missing if the tax due is less than ≡ ≡ ≡ ≡ ≡ ≡ . Accept the return as filed.

Notification Of A Potential Manual Interest Or Penalty Adjustment (CP186)

  1. This section contains information and procedures for the CP 186.

    1. A potential manual penalty or interest adjustment occurs when a payment transaction posts to a module and the credit amount is greater than the assessed module balance due amount.

    2. When there is an interest or penalty computation restriction present.

    3. When an account transfers in from the Retention Register with Doc Code 51 or 52.

    4. An additional "CP 186" Notice generates when subsequent credits post and the same situation as above is present. The EP Accounts Unit works all CP 186s that are for Form 5330, (MFT76).

  2. Some conditions which prevent IRS computer systems from automatically calculating interest are:

    1. Interest previously was manually assessed (TC 340) or abated (TC 341).

    2. FTP penalty previously was manually assessed (TC 270) or abated (TC 271).

    3. Returns with prior year, ending before January 1, 1970.

    4. Audit or DP tax adjustment (TC 290X or 30X) posted with a 23C date before January 1, 1970.

    5. Any transferred in transaction (Doc. Code 51 or 52 posted).

    6. See IRM 20.2.5.6.1, Reasons to Manually Compute Interest, for additional reasons an account may need to be restricted.

  3. Analyze the module and take the required action as follows:

    1. If unresolved TC 480 or TC 780 is present on the module, forward to the Offer-in-Compromise File for resolution or routing to the Technical Support function.

    2. If an unreversed TC 520 is on the account, refile any returns associated with notices and destroy the CP 186. When the bankruptcy closes, Technical Support function disposes of any credit.

  4. Request the source document, if needed, to determine the reason for the restriction.

  5. Review the penalty on the original assessment to verify if correct assessments were made.

    1. If the original assessment was incorrect, use the correct figures when resolving the CP 186.

    2. If a previous FTP penalty was abated for reasonable cause (RC 62), don't reassess the amount associated with RC 62.

    3. If the maximum FTP was reached and a TC 971 action code 262 hasn't generated, input TC 971 action code 262.

      Note:

      See IRM 21.7.11, Additional Computer Paragraph Notices and Transcripts, for additional information addressing Manual Interest/Penalty Adjustment.

  6. Review the interest assessed.

    1. See IRM 20.2.5.1.3, Steps to Compute Interest, for procedures on how to compute interest.

    2. Verify previous restricted interest transactions before recomputing a module. If you are unable to verify the TC 34X/77X amount, secure the adjustment document or case file.

      Note:

      See IRM 20.2.5.1.3, Steps to Compute Interest, for further information.

  7. Input a non-restrictive TC 340 whenever possible. Refer to IRM 20.2.5.6.3, Non-Restricting Transaction Code (TC) 340, for details.

  8. If additional penalty and/or interest is due, input an adjustment to assess the additional amount. Follow the figure below:

    Figure 21.5.11-10

    Penalty and Interest

    If: Then:
    The available credit is less than the total additional penalty/interest due Assess the total additional penalty/interest. Exception: If the available credit is ≡ ≡ ≡ ≡ ≡ or less than the additional penalty/interest, assess only the available credit. Refer to IRM 20.2.1.5.2.2 Under-assessed Underpayment Interest.
    The available credit is more than the additional penalty/interest Assess only the total additional penalty/interest due. The remaining balance (overpayment) should be released for refund/offset.
    No additional penalty/interest is due Treat the CP 186 as classified waste and, if a credit is present, transfer it to the correct period or input TC 290.00 to release the freeze (HC 3, BLK 15, NSD).
    No other adjustment action is needed Use PC 5 to force the computer assessment of unrestricted interest and/or FTP penalty and issue a balance due notice to the taxpayer. (See IRM 21.5.2, Adjustment Guidelines, for more information on use of PC 5.)

Amended Return (CP 190) - No Original Posted

  1. CP 190 generates within four cycles after a "G" coded TC 976 Form 5330, return posts to a module which doesn't contain an original return (TC 150).

  2. CP 190 is associated with TC 976 return and forwarded to EP Accounts for resolution.

  3. E- freeze generates along with CP 190. Release the E- freeze before closing CP 190 cases by either posting:

    • TC 971 action code 002

    • TC 150

  4. EP Accounts determines disposition of TC 976 Form 5330.

    • Check IDRS for an unpostable or rejected TC 150.

    • Analyze return and any attached schedules for possible re-input to another tax period or TIN.

    • If TC 150 posts to account after the CP190 generated, close the base for the CP190 to the DUPF control after it was assigned to an employee. Resolve duplicate filing condition.

    • If further information is needed, call or send the filer a copy of the return using the appropriate C letter. Suspend case for 40 days if corresponding.

TC 976 Return Intended as Original
  1. If TC 976 return needs to be re-input as original, edit and reprocess the return using Form 13596.

  2. Follow instructions in IRM 21.5.2, Adjustment Guideline, when reprocessing documents.

TC 976 Return Posted to Incorrect TIN/Tax Period, Account for Which It Was Intended Contains the Original Return (TC150)
  1. When you determine the TC 976 return was intended for another module which contains the original return, take action on both accounts.

  2. On module from which TC 976 return is moving:

    • Transfer any credits which don't belong on module. (Use TC 570 if needed)

    • Input TC 971 action code 002 to release E- freeze.

  3. On module to which TC 976 return is moving, follow instructions in IRM 21.7.9.4.1.1.1.1, Reprocessing TC 976 Return to Module with TC 150.

TC 976 Return Posted to Incorrect TIN/Tax Period, Account for Which It Was Intended Doesn't Contain an Original Return (TC 150)
  1. If TC 976 return was intended for another module which doesn't contain an original return, take action on both accounts.

  2. On module from which TC 976 return is moving:

    • Transfer any credits which don't belong on module. (Use TC 570 if needed)

    • Input TC 971 action code 002 to release E- freeze. See IRM 21.7.9 for proper input.

  3. On module to which TC 976 return is moving:

    • Use Form 13596 to reprocess return and follow instructions in IRM 21.5.2, Adjustment Guideline Procedures.

    • Input TC 599 cc 018 (if module is in MF Status 02 or 03).

    • Input TC 971 action code 017.

TC 976 Return Posted to Correct Module, Original Return Posted to Incorrect Module
  1. When TC 976 return posts to correct module, but original return intended for that module incorrectly posts to another module, secure the original return on incorrect module.

  2. On module containing original return:

    • Abate tax assessed on incorrect module using appropriate HC. See IRM 21.5.2.4.23.4

      Note:

      If restricted, manually compute the amount of penalties and interest to abate. If penalties and/or interest aren't restricted, those items automatically reduce when the tax is corrected.

    • Transfer credits to correct module. (Use TC 570 if needed.)

    • Input TC 971 action code 001.

  3. On module containing TC 976 return:

    • Reprocess either original or amended return as TC 150.

      Note:

      Reprocessing original return to correct account results in a duplicate filing condition. Avoid this by either perfecting and then re-inputting TC 976 return as original return, or by preparing a dummy return with correct tax reported and using the same DLN as TC 976 return. Attach TC 976 return behind dummy return.

TC 976 Return Cannot Be Obtained From Files
  1. When working CP 190, and TC 976 return can't be obtained from Files, follow procedures below:

    • Request a "special search" from files.

    • Correspond (use Letter 418C) or call filer to obtain a copy of original and amended returns.

    • Put case in "M" Status and suspend for 40 days.

  2. If filer doesn't reply and TC 976 return still can't be located, follow the figure below:

    Figure 21.5.11-11

    TC 976 Return Not Located

    If: Then:
    There are no credits on module Input TC 971 action code 002 to release E- freeze.
    There are credits on module which don't belong on any other module (appropriate research must be performed) Prepare a dummy return using DLN of TC 976 return, with a tax liability equal to credits.

    Note:

    Use this procedure ONLY if sufficient information isn't available to process a return as original.

BMF Duplicate Filing Conditions (CP 193)

  1. This section contains information and procedures related to duplicate filing conditions.

  2. A duplicate filing condition occurs when a return (TC 976) posts to a module already containing a return. Master file generates an A Freeze and a CP 193. The CP 193 is associated with the return and forwarded to Adjustments.

  3. When a return is filed with the amended box checked, or marked "amended" , "corrected" , "supplemental" , "superseding" , etc., Code and Edit inputs CCC "G" . Only EIN, name control, plan number, tax period, received date, condition codes, sponsor EIN, sponsor plan year ending and CAF indicator get transcribed.

  4. All duplicate filing cases are controlled on IDRS and stay open until action is taken to resolve the case.

Resolving CP 193
  1. Determine and resolve duplicate filing conditions by examining and comparing information on the CP 193 and returns. Use CP 193, duplicate return, CFOL command codes and original return (secure if needed) to resolve case. Compare the items listed below:

    • Difference in Filer’s entity (names, addresses, TINs, etc.)

    • Tax Periods

    • Plan Numbers

    • DLNs

    • Received dates

    • Signature, title, and signature date

    • Transaction codes

    • Deposits (compare dates and amount)

    • Payment(s) received with return(s)

    • Module balance

  2. Check command codes ENMOD, NAMEB, NAMEI, NAMEE or INOLE when the TIN is circled out and a new TIN written in.

  3. Some of the most common reasons for filing duplicate or amended returns include:

    • Filer filed a second return to correct erroneous information on the first return.

    • Filer filed an original return but underpaid the tax liability.

    • Filer filed a second return in response to a balance due notice regarding missing payments and penalties.

    • Organization filed a second return attaching missing information requested by the IRS.

Various TC 976 Conditions
  1. If any of the following conditions applies to the TC 976 account, refer to the procedures in IRM 21.7.9:

    • Two returns posted to same account. Correct return posted first. TC 976 belongs on different period or EIN.

    • Reprocessing TC 976 return to module with no TC 150.

    • Reprocessing TC 976 return to module with TC 150.

    • Two returns posted to same account. Incorrect return posted first. TC 976 return is correct return.

    • Reprocessing TC 150 return to module with no TC 150.

    • Reprocessing TC 150 return to module with TC 150.

Amended/Supplemental
Return-Increase
  1. Returns reporting tax increases are sometimes marked as "supplemental" returns. Additional tax is usually paid with the supplemental return.

  2. The filer doesn't always explain why they submitted a second return. Thoroughly research account to determine whether to assess the liability on the second return. Consider such items as:

    • Do the filing/signature dates, liability periods, credits claimed or payment made, relate to any other tax period?

    • Is there any change to the entity information which could indicate a different filer?

    • Are there any open modules for which second return is intended?

    • Is there an indication the second return is in response to previous IRS correspondence?

  3. If the reason for filing the second return isn't clear, you need additional information. Action required:

    1. Request TC 150/976 documents, if needed.

    2. Attempt to contact the filer for additional information.

    3. Document call attempts and any conversations with the taxpayer.

    4. Correspond (generally Letter 418C, Amended/Original Return Unavailable, Copy Requested, or Letter 31C, Duplicate Returns filed; Explanation Requested, with the filer if unable to contact by phone.

    5. If corresponding, suspend for 40 days.

  4. Follow these steps after you do complete research and are unable to resolve the case, or are unable to determine because you receive "no reply" from the filer:

    1. Re-compute tax liability. A tax increase on a supplemental return is increased for the amount of the supplemental return. A tax increase on an amended return is increased for the difference between the original and amended returns.

    2. Math verify the amended return if it is "G" coded and the tax increase is greater than $10.

    3. Compare information on CP 193 with IDRS data. Consider any action which has taken place since the CP 193 generated before adjusting the account.

    4. Increase tax using TC 29X using the appropriate blocking series, abstract numbers, etc. Use blocking series 00 if we secured the TC 150 document. Use blocking series 18 on superseding returns only.

    5. Adjust the penalty and interest if needed.

    6. The interest computation date (INT-COMP-DT) is the return due date of the abstract. If the amended return includes multiple abstracts, then post each one separately.

Amended/Supplemental Return–Decrease
  1. Backup information is required for amended returns filed to decrease tax including an explanation of why the tax should be decreased.

  2. Follow these steps on cases requesting a tax decrease:

    1. Re-compute the tax liability.

    2. Compare information on the CP 193 with IDRS data. Consider any action which has taken place since the CP 193 generated before adjusting the account.

    3. Decrease tax with TC 29X using the appropriate blocking series, abstract numbers, etc.

    4. Adjust penalty and interest if needed. If penalties and interest aren't restricted, the account automatically corrects when the tax is corrected.

    5. The interest computation date (INT-COMP-DT) is the return due date of the abstract. If the amended return includes multiple abstracts, then post each one separately.

Resolving True Duplicate
  1. A true duplicate condition occurs when a filer files two returns for the same tax period, abstract number, plan number and tax with the same information on both returns and no tax change is required. Review all attached schedules for any changes.

  2. Do the following:

    1. Analyze the account date and both returns (if original is needed to resolve case) to verify they are true duplicates.

    2. Input TC 290 zero in appropriate blocking series to release -A freeze. Use duplicate return for source document.

      Note:

      If module balance is in a credit status, also use Hold Code 3 to prevent an adjustment notice from generating.

    3. Staple CP 193 to duplicate return.

      Note:

      If we secured the original return, staple duplicate return behind original and use blocking series 00.

CP193 Received Without Duplicate Return
  1. When a CP 193 is received without the duplicate return, attempt to determine if it is a true duplicate using CC BRTVU.

    Figure 21.5.11-12

    CP 193 Received Without Duplicate Return

    If: Then:
    The return proves to be a true duplicate Input TC 290 in BS 10/15 (unless original return is attached) and note in the Remarks portion of adjustment document " True Dup"
    You can't determine the return is a true duplicate Request return from Files.
  2. When unable to secure a return from files after the first attempts or within 14 days:

    • Send letter 418C to organization to request a copy. (You may also contact the organization by phone to obtain a copy.)

    • Suspend case for 40 days.

  3. If there is no reply and:

    Figure 21.5.11-13

    No Reply to CP 193

    If: Then:
    A payment came in with duplicate return
    1. Assess tax equal to payment amount.

    2. Determine reason for additional excess credit if module credit balance is in excess of payment submitted with return.

    3. Resolve any misapplied payments or other module freeze conditions before making assessment.

    Information isn't available to determine adjustment needed and no payment came in with duplicate return Input TC 290 to release the -A freeze.

Reprocessing Returns

  1. When reprocessing a return, use Form 13596.

  2. When reprocessing a dummy return in lieu of original or duplicate return, use the same received date as the original or duplicate, respectively.

  3. Input TC 971 with the appropriate action code to the incorrect module (to identify cross reference TIN/Plan number/Tax period data) whenever an original or amended/duplicate return posted to an incorrect TIN/Plan number/Tax period and reprocessing to correct the module. See IRM 21 for valid TC 971 action codes.

  4. Input TC 290 zero to release the freeze.

Reprocessing Secured Returns
  1. If the return was secured by TE/GE and needs reprocessing, use the following steps:

    • Request return from files.

    • If return isn't received from files after the first attempt or 14 days, try to get a copy from the agent and process the copy as an original, use the same received date as the original.

  2. If unable to obtain a copy from the agent prepare a dummy return and reprocess in lieu of original. Use the same received date as the original.

  3. If the return was originally secured by a TEGE EP Exam office, ensure that the copy you send over for reprocessing is clearly marked "Secured by TEGE EP Exam."

  4. Send all reprocessed returns to the campus as an expedite request.

Two Returns Posted to Same Module
TC 976 Posted to an Incorrect Module

  1. If TC 976 return posted to an incorrect module, use IDRS and CFOL command codes to determine the account to which to reprocess it.

  2. If a TC 150 exists on the correct module:

    1. Input TC 971 with action code 017 using CC REQ77 and make any required adjustment to the correct TIN/Plan number/Tax Period. Use appropriate blocking series, hold codes, etc.

    2. Transfer any credits which don't belong and input TC 971 with action code 002 using CC REQ77 on the incorrect module. Input TC 290 zero (use appropriate hold code) to release the freeze.

  3. If no TC 150 exists on the correct module:

    1. Prepare Form 13596 to reprocess the TC 976 to the correct module.

    2. Input TC 599 with closing code 18 using CC FRM49 and a TC 971 with action code 017 using CC REQ77 on the correct module.

    3. Transfer any credits which don't belong and input TC 971 with action code 002 using CC REQ77 on the incorrect module. Input TC 290 zero (use appropriate hold code) to release the freeze.

Two Returns Posted to Same Module, Incorrect Return Posted First

  1. When you determine the TC 150 return posted to an incorrect module, use IDRS and CFOL command codes to determine the module to which it should be processed.

  2. If a TC 150 exists on the correct module:

    1. Input TC 971 with action code 17 using CC REQ77 and make any required adjustment to the correct TIN/Plan number/Tax Period. Use appropriate blocking series, hold codes, etc.

    2. Transfer any credits which don't belong and input TC 971 with action code 001 using CC REQ77 on the incorrect module. Input TC 29X and make any required adjustment and release the freeze.

  3. If no TC 150 exists on the correct module:

    1. Prepare Form 13596 to reprocess the TC 976 to the correct module.

    2. Input TC 599 with closing code 18 using CC FRM49 and a TC 971 with action code 17 using CC REQ77 on the correct module.

    3. Transfer any credits which don't belong and input TC 971 with action code 01 using CC REQ77 on the incorrect module. Input TC 29X and make any required adjustment and release the freeze. Use appropriate blocking series, hold codes, etc.

Shipment of Source Documents

  1. Return documents (in separate folders labeled by type) to Campus Files within seven workdays of input.

  2. Mail/route source documents immediately after Quality Review is complete. If you keep the source document beyond three (3) workdays for completion of certain ADJ54 transaction cases, input "R" in the remarks field of the input screen. Notify the Files Management Unit immediately of any anticipated shipment delays.

  3. Route all adjustment documents to Files marked Attn.: Files Management Unit. Complete Form 4442, Inquiry Referral or Form 8485, Assessment Adjustment Case Record. Include the IDRS sequence number in the top right corner before placing the documents in the employee folder.

  4. Prepare separate adjustment folders for each date and type of input. Label the outside of each folder as follows:

    1. IDRS number

    2. Date

    3. Category of source documents

    4. Sequence numbers (e.g., 01–14QR), and

    5. Release date (e.g., September 30, 2014)

      Reminder:

      Local procedures may impose additional or alternate requirements.

  5. Prepare a separate folder for ADJ54 case actions. Date and sequentially number (legibly and readily available for Files to recognize) the Form 8485 or other worksheets used to notate the case and account actions taken. This helps Files maintain the integrity of the cases. Place other transactions, e.g., credit transfers, in a separate "Other Documents" folder and ship to Files daily.

  6. Remember to insert your source documents into your folder as soon as you complete the IDRS account adjustment. If you forget to insert a document into the folder don't throw it away. Obtain the DLN and send to Files for association with your case file. If you don’t include the source document, the Files Management Unit may contact you and request it.

  7. See IRM 21.5.2 for additional information.

Transcript Processing

  1. This section contains instructions on resolving cases generated from other types of transcripts.

–E Freeze/Debit Offset In

  1. The "– E Freeze" (released after 10 cycles) indicates an FTD discrepancy in the BMF debit module which generates a balance-due notice. The " – E Freeze" module can contain debit balance modules resulting from posting of transactions subsequent to original return processing.

  2. Subsequent transactions can be any combination or separate posting of tax, penalty, interest, or credit reversals which result in the module going from zero or credit balance to a debit balance or from a debit balance to a greater debit balance.

    1. The module balance before posting of the subsequent transaction can be zero, debit, or credit.

    2. The module balance after posting of the subsequent transaction must be a debit.

    3. The account can't have a module currently in TDA Status 22, 23, 24 or 26 or have had a module close from TDA Status in the previous 12 months.

  3. The "– E Freeze," under the subsequent transaction criteria, releases if:

    1. The 10 cycle freeze expires. (If all other criteria are met, the 10 cycle freeze resets based on the most current subsequent transaction posting.)

    2. The module reaches zero or credit status.

    3. The account/module reaches TDA status.

  4. The system issues the appropriate notice based on posting of the subsequent transaction(s) if a notice otherwise would have been issued.

  5. Research "MF/NMF" for credits. Transfer credits appropriately (ADD24 on NMF and ADD34 on MF ).

    Note:

    If a TC 973 is on the account, order the TC 973. Manually compute penalty and interest.

NOMRG Transcripts

  1. Merge fail transcripts (NOMRG) are computer generated when plan data account consolidation fails.

  2. Each campus determines the area(s) where to resolve EP NOMRG.

  3. These transcripts generate when an invalid condition exists in the account of the old and/or new plan data module. Each transcript has a title and a code to indicate the invalid condition. These titles and codes are similar to those on the Entity Merge Fail transcripts.

  4. Before resolving the merge fail condition:

    • Always check for transcription errors. Request complete transcripts which involve the plan data module.

    • Follow the procedures in IRM 3.13.36. EPMF Account Numbers, because these transcripts involve the plan data module.

AM12 Resolution

  1. Refer to IRM 21.2.4, Master file Accounts Maintenance, for complete resolution to AM12 transcript.

  2. To resolve transcripts where the TC 610 posted, but the related tax return didn't post, perform complete research.

    Example:

    Research SCCF to determine return status.

  3. Send a 112C letter to the filer, requesting a signed copy of a return, if needed.

  4. If you don’t receive a response after 45 days and you’ve done complete research, take the following actions:

    • If the taxpayer's account contains a TC 610 payment along with a TC 460 (extension of time to file before or after the TC 610 payment ) posting date, change the TC 610 payment to a TC 670 payment using the same transaction date as shown on the original TC 610 payment. Close your control base. No further action is required on this account.

    • If you determine from researching Command Code (CC) TRDBV, that the original ELF filed return or paper return was rejected, request a newly signed copy of the return from the taxpayer. If you receive a newly signed copy of the return, treat as an original return by editing the return and forwarding the return to Submission Processing. In addition, change the TC 610 payment to a TC 670 payment using the date of the TC 610 payment. If you can’t secure a return, change the TC 610 payment to a TC 670 payment and close your case.

    • AM12 follow-up transcripts are suppressed. Notice CP 80, We have Not Received Your Tax Return, goes out to the filer.

    Note:

    Don't close your case until you do complete research to locate the return.

  5. If you determine from your research, that the taxpayer has a Form 1065 filing requirement, but files a Form 1120, U.S. Corporation Income Tax Return, the Form 1120 filing is not considered to be a valid tax return for the taxpayer (Assessment Statute Expiration Date (ASED) does not start). The filing of the Form 1120 does not provide enough information for us to make an assessment for the Form 1065. On this type of tax return filing, take the following actions:

    • Change the TC 610 payment to a TC 670 payment with the same date as the original TC 610 payment.

    • Send a letter to the taxpayer requesting that they file the correct tax return (Form 1065) and close your control bases.

Form 5330/5500 Accounts Maintenance Transcripts

  1. The transcripts replace the Credit/Debit Listing that is accessible on Control - D. They are formatted the same as existing AMRH transcripts and are referred to as:

    • AM 31 - Form 5330, or 5500 credit balance

    • AM 32 - Form 5330, or 5500 debit balance

  2. Work credit transcripts within 30 days to prevent erroneous notices.

  3. If the transcript is a "Follow-up" or a "Multiple" , the letter "F" or "M" prints to the right of the AMRH 31 or 32. See below:

    • TRANSCRIPT TYPE AMRH 31 F

    • TRANSCRIPT TYPE AMRH 32 F

    • TRANSCRIPT TYPE AMRH 31M

    • TRANSCRIPT TYPE AMRH 32 M

    • TRANSCRIPT TYPE AMRH 31FM

    • TRANSCRIPT TYPE AMRH 32FM

  4. Research to determine if applicable extension was filed. If an approved extension is located for the tax period, abate or adjust the penalty as needed.

  5. A transcript generates six weeks after the first cycle in which the tax module has a credit or debit balance. Follow-up transcripts are issued every six months (26 cycles) for as long as the tax module still meets the established criteria.

  6. A transcript generates for each Form 5330 or 5500 module in either a credit or debit balance. The AMRH transcript records the following information:

    • Transaction date

    • EIN, MFT & Tax Period

    • Plan Number

    • TC 150 DLN

    • Module balance

  7. Refer to the procedures outlined below for resolving Form 5330 or Form 5500 AM Credit/Debit Transcripts.

  8. In addition to the specific instructions below, see the following If and Then tables for procedures when working AMRH transcripts:

    Figure 21.5.11-14

    AMRH Transcript Procedures for Forms 5330 (MFT 76)

    IF: Then:
    TC 973 with -I freeze
    • Manually update interest to 23C date.

    • Verify the prior interest is correct.

    • Use the abstract return due date as the INT-COMP-DT.

    • If a TC 973 is on the module, interest must be manually computed, even if there is no -I freeze.

    • If the account no longer needs to be restricted, input a non-restricting TC 340. See IRM 20.2.5.6.3, Non-restricting Transaction Code (TC) 340, for more information.

    TC 973 with no -I freeze Input TC 290, PC 5 (Computer adjusts the interest and sends notice).
    TC 973 with no -I freeze and TC 530 Close transcript as "No Action" or Input TC 290, Hold Code (HC) 3, PC 5.
    No TC 973 with -I freeze Input a non-restricting TC 340 Priority Code (PC) 5 (Computer adjusts the interest and sends notice) or manually compute interest.

    Note:

    If a TC 340 was input before November, 2012, don't input a TC 342 to release the restriction. The account must remain restricted. Accounts containing interest computation date errors should also remain restricted. You can also input a non-restricted TC 340. See IRM 20.2.5.6.3 for more information.

    Interest assessed within 45 days from new transcript. Close transcript as "Previous Action" or "No Action"
    Account has a -V (Bankruptcy) or -W (OIC or Litigations) freeze Close transcript as No Action.
    No TC 973 with and no -I freeze Input TC 290, PC 5 (Computer will adjust the interest and send notice).

    Note:

    Input an interest computation date for each abstract when adjusting MFT 76. When posting a tax adjustment, the interest computation date is the due date of the tax liability. When posting a penalty adjustment, the interest computation date entered is the interest start date on the penalty. See IRM 20.2.5.3, Interest on Penalties and Additions to Tax, for further information on penalty start dates. If there is a signed agreement that isn’t assessed within 30 days, interest must be manually computed because Master File ignores the 870 waiver date.

  9. When computing tax, penalty and interest refer to IRM 20.2.5, Interest on Underpayments and IRM 20.2.11.20, Employee Benefit Plans. Apply payments on a balance due module to the return with the most imminent CSED first.

  10. Refer to the table below to resolve Form 5500 transcripts:

    Figure 21.5.11-15

    Form 5500 Transcripts

    If: Then:
    Account not worked within 45 days Input a TC 290 for zero priority code 5. Computer adjusts interest and issues a penalty notice.
    Interest assessed within 45 days from new transcript. Close transcript as "Previous Action" or "No Action"
    Account has a -V (Bankruptcy) or -W (OIC or Litigations) freeze Close transcript as "No Action "

Form 5330 AM 31 Transcript Procedures Credit Module Balance

  1. Refer to the procedures below to resolve Form 5330, AM 31 transcripts. Secure the original return from files if needed in order to determine the correct liability amount (TC 150).

  2. Verify the green rocker money amount shown on the return matches the TC 610 payment posted to MF.

  3. Determine the correct TC 150 amount. One check may have come in for more than one tax and the tax may have been split on a separate Form 5330, during processing.

  4. Adjust the TC 150 amount if applicable by inputting a TC 290 increase via REQ54 for the appropriate money amount using the applicable HC (3 or 4).

  5. If the overpayment belongs to a different plan number, tax period or EIN, transfer the payment to the correct account using CC ADD/ADC 24. Don't correspond with the filer.

  6. If you can't resolve the credit module balance using the procedures above or a balance remains after taking the above steps, refer to the table below:

    Figure 21.5.11-16

    Additional Procedures to Resolve Credit

    If: And: Then:
    The account is in a credit status Basic IDRS research determines where to transfer the payment Transfer the payment to the applicable module using CC ADD/ADC 24, or Form 2424 if applicable
      You can't determine additional credit application through basic IDRS research
    • Call the filer. Make two attempts during regular business hours.

    • If unable to contact by phone, send a letter to the filer explaining account status. Print a copy of letter for the case file. Suspend case for 45 days (30 day response time)

    • If filer responds to the letter with additional information, follow their instructions

    • If no reply to the correspondence, transfer credit to Excess Collections (XSF-6800 Account)

    Account is in a credit status Additional credit application cannot be determined through basic IDRS research and payment is a TC 610 Close as "no reply" .
  7. If the filer states they overpaid the account by submitting duplicate payments and requests the excess credit be refunded, instruct the filer to submit a request to have the money refunded. See IRM 3.12.179.37.6 .

Form 5330 AM 32 Debit Module Transcript

  1. Use these procedures when attempting to resolve a Form 5330, debit module balance. Secure the original return from Files (two attempts) before taking the following action.

    Note:

    If the debit balance is from a prior Credit/Debit listing or AMRH 32 Transcript ) and all required actions occurred, input another TC 290 for zero priority code 5. This generates a CP161 notice to the filer.

    Figure 21.5.11-17

    Form 5330 Debit Module Balance Procedures

    If: And: Then:
    A green rocker is present on the return You can't locate the payment through basic IDRS research Refer to Payment Tracer procedures
    A green rocker isn't present on return You can't locate the payment through basic IDRS research Input a TC 290 for zero using priority code 5 to generate a notice to the filer.
  2. If we receive a response from the filer indicating that he/she will submit a payment, refer to the procedures in the figure below:

    Figure 21.5.11-18

    Responses Received

    If: Then:
    The filer states he/she will submit a payment
    • Instruct the filer to send payment and copy of the letter to the following address:
      Internal Revenue Service
      1973 Rulon White Blvd
      Ogden, UT 84404

    • Input a history item to note the expected date of payment on DI/AMS and TXMODA.

    • Close control base on IDRS, monitor account until the payment posts to MF.

Form 5500 AM 31 Transcript Procedures Credit Module Balance

  1. If the overpayment belongs to a different plan number, tax period or EIN, transfer the payment to the correct account using CC ADD/ADC 24. Don't correspond with the filer.

  2. Research to determine if the filer submitted the payment as a prepayment to the penalty. If research shows it was a prepayment, follow procedures for Form 5500 penalty assessments.

  3. If you can't resolve the credit module balance using the procedures above or a balance remains after taking the above steps, refer to the figure below:

    Figure 21.5.11-19

    Form 5500 Credit Additional Procedures

    If: And: Then:
    The account is in a credit status Basic IDRS research determines where to transfer the payment Transfer the payment to the applicable module using CC ADD/ADC 24, or Form 2424 if applicable
      You can't determine the additional credit application through basic IDRS research
    • Call the filer. Make two attempts during regular business hours.

    • If unable to contact by phone send a letter to the filer explaining account status. Print a copy of letter for the case file, Suspend case for 45 days (30 day response time)

    • If filer responds to the letter with additional information, follow their instructions

    • If filer doesn’t reply, transfer credit to Excess Collections (XSF-6800 Account)

  4. If the filer states they overpaid the account by submitting duplicate payments and requests the excess credit be refunded, instruct the filer to submit a request refund the money.

Form 5500 AM 32 Transcript Procedures Debit Module Balance

  1. If a module was previously fully paid within the payment grace period (21 calendar days if under $100,000 or 10 business days if $100,000 or more), input a TC 340 for zero to stop accruals from posting and prevent notices from being issued.

  2. If balance on the account is ≡ ≡ ≡ ≡ or less and on BMFOLT, input a TC 340 for zero, hold code 3 and payment date. This removes the balance and stops future transcripts from generating.

  3. If the balance on the account is ≡ ≡ ≡ ≡ ≡ or less and on TXMOD, input a TC 341 with money amount, hold code 3 and payment date. This removes the balance and stops future transcripts from generating.

Transferring Excess Credit

  1. When you determine from research the overpayment doesn't belong to the Form(s) 5330 or 5500 module, or the filer doesn't respond to our correspondence, transfer the excess credit(s) to either the Unidentified Remittance File (URF - 4620 Account) or Excess Collection File (XSF-6800 Account). Prepare Form 2424 (payment date 11 months or less) and/or Form 8758 (payment date is older than 11 months).

    Note:

    If credit is less than $1, transfer the credit to 6540 account for both MFT 74 and MFT 76. See IRM 3.17.10.3.4(3).

  2. Credit(s) previously applied to MF from the 6400 Account require two credit transfers. Prepare Form 2424 and Form 8758 in duplicate . Use Form 2424 to transfer the credit back to the 6400 Account and use Form 8758 to transfer the credit from the 6400 Account to either URF or XSF.

  3. Prepare a separate Form 2424, in duplicate, and/or a Form 8758 for each credit awaiting a transfer. Credits remain in URF until the payment date reaches one year old. It then automatically drops from URF to XSF. Unpaid credits remain on IDRS in XSF for 7 years after the XSF entry date.

    Figure 21.5.11-20

    Transferring Excess Credit

    If the credit is: Then:
    11 months old or less
    • Prepare two Forms 2424, in duplicate

    • Attach supporting documentation to both sets of Form 2424

    • Route all forms to appropriate mail stop.

    11 months but less than 12 Suspense the case until it is 12 months old to avoid rejection of forms.
    12 months old or older
    • Prepare Form 2424 in duplicate to transfer the credit from MF to the 6400 Account.

    • Prepare Form 8758 to transfer credit from 6400 Account to 6800 Account.

    • Attach supporting documentation.

    • Route all forms to appropriate mail stop.

  4. For additional information refer to IRM 3.17.220, Excess Collection File and IRM 3.17.10, Revenue Receipts.

Form 5330 Missing Payment Research

  1. A payment tracer is the process used to locate a missing or misapplied payment made by a filer or organization. To resolve a payment tracer case, correctly apply the missing or misapplied payment to the organization’s account. Refer to IRM 21.5.7, Payment Tracers, for specific guidelines.

IDRS Research for Payments

  1. Search for payment on IDRS and CFOL. Refer to Document 6209, IRM 2.3, IDRS Terminal Responses, and IRM 2.4, IDRS Terminal Input, for information on displaying and using IDRS/CFOL information.

  2. Use CC NAMEI, NAMEB, to obtain TIN information.

  3. Use all appropriate IDRS/CFOL command codes to search for a payment, see examples below:

    • SUMRY, TXMOD, to check for possible misapplied payments

    • IMFOL, BMFOL, if no open TXMODs, or for the possibility the payment was made at another campus

    • INOLET, INOLEX, to check all related TINs, valid or invalid, provided by filer

    • URINQ, to research unidentified remittances

    • XSINQ, to research excess collections

    • SCFTR, Service Center Control File

    • UPTIN, to check open and closed unpostables for a specific TIN

  4. Call or fax filer to request information needed to resolve the case, at least two times. If unable to contact the filer, use the appropriate "C" letter.

Form 5330 Claim For Refund

  1. The appropriate TE/GE appointed office handles:

    1. TE/GE claims on Form 843

    2. Amended TE/GE returns requesting a refund of an amount previously paid or assessed

    3. Any other document sufficiently detailed to be treated as either of the above

    Note:

    Campus employee don't generate over assessment transactions on TE/GE returns unless directed or requested by local TE/GE offices.

    Exception:

    Math errors or IRS campus errors.

  2. TE/GE returns subject to this procedure are:

    • Forms 5500 and 5500 - SF (EPMF).

    • Forms 5500 - EZ and 5500 - R (EPMF).

    • Form 5330, (NMF).

    • Form 5330, (BMF)

  3. Send all Form 5330, claims for refund, via Form 3210, to OAMC - EP Accounts Mail Stop 6270.

  4. EP Accounts Unit screens TE/GE claims to ensure that a specific return was filed with payment of an amount at least equal to the amount claimed. Attach all research to the claim form, amended return, or correspondence. Obtain the original return (if pre-EFAST or Form 5330, ), recharge it to the Area Office, and also attach it to the claim form, amended return, or correspondence. If the original return involved was processed as a NMF return (for example, Form 5330), secure a copy of the index card and NMF Transcript (if available) and attach it to the claim documents. Establish on AIMS and forward the entire package to the TE/GE program analyst who oversees the project, Mail Stop 1110 using Form 12634.

  5. For all IRS offices, other agencies or filers who are sending items through a vendor (other than the U.S. Postal Service), use the following address:

    Ogden IRS Campus
    Attn.: Claim For Refund - Form 5330
    Mail Stop 6270
    1973 North Rulon White Blvd.
    Ogden, Utah 84404

  6. For filers or anyone sending the information through the U.S. Postal Service, use the following address:

    Note:

    Use the 84201 zip code with this address.

    Internal Revenue Service
    Mail Stop 6270
    Attn: Claim for Refund - Form 5330
    Ogden, Utah 84201

  7. If a filer files an amended Form 5330 return to claim a refund or credit, the claim "must" state in detail the reasons for claiming the refund, and provide the appropriate supporting evidence. See 26 CFR 301.6402-2 for more details.

    Note:

    Don't correspond with the filer for supporting documentation that may be missing if the tax due is less than ≡ ≡ ≡ , accept the return as filed.

  8. OAMC works Form 5330, claims listed below:

    • IRC 4975 - Prohibited Transactions - Abstract 159

    • IRC 4971 - Minimum Funding Deficiencies - Abstract 163

    • IRC 4980 - Reversions - Abstract 204

  9. The EP classifier in the field considers/disallows the following claims for the Form 5330:

    • IRC 4972 - Tax on Nondeductible Employer Contribution to Qualified Plans

    • IRC 4973 - Tax on Excess Contributions to IRC 403(b)(7)(A) Custodial Accounts

    • IRC 4976 - Tax on Disqualified Benefits for Funded Welfare Plans

    • IRC 4978 - Tax on Certain ESOP Dispositions

    • IRC 4979 - Tax on Certain Prohibited Allocations for Qualified ESOP Securities

    • IRC 4977 - Tax on Excess Fringe Benefits

    • IRC 4980F - Tax on Failure to Provide Notice of Significant Reduction in Future Accruals

    • IRC 4971(f) - Tax on Failure to Pay Liquidity Shortfall

    • IRC 4971(g) (2) - Tax on failure to comply with a funding improvement or rehabilitation plan

    • IRC 4971(g) (3) - Tax on failure to meet requirements for plans in endangered or critical status.

    • IRC 4971(g)(4) - Tax on failure to adopt rehabilitation plan.

    • IRC 4965 - (Abstract 237) Prohibited Tax Shelter Transaction for Entity Managers

Statute of Limitations for Claims

  1. According to IRC 6511(a), a claim for credit or refund, penalties and interest previously paid must be filed by the later of:

    • Three years from the original return filing date.

    • Two years from the tax payment date of TC 610, 650 or 670 and 2 years from the cycle date of TC 700, 706, 730, 736 or if a 6603 deposit/cash bond, two years from the date the deposit/bond is converted to a payment of tax..

  2. For a claim filed within the three year period, the amount to be credited or refunded is limited to the tax paid during the three years immediately preceding the filing of the claim, plus the period of any extension of time to file. IRC 6511(b)(2)(A).

  3. For a claim filed within the two year period, the amount is limited to the portion of tax, penalties or interest paid during the two years immediately preceding the filing of the claim. IRC 6511(b)(2)(B).

  4. The filing of a claim for refund keeps the statute open only with respect to the item(s) described in the claim. Generally consider a supplemental claim filed after the expiration of the statute that requires the investigation of facts or legal positions that wouldn't have been disclosed by the investigation of the original claim as an untimely new claim.

  5. A consent to extend the statute of limitations on assessment (e.g., the IRS and the filer sign a Form 872, Consent to Extend the Time to Assess Tax, extends the statute of limitations for claiming a credit or refund to six months after the expiration of the assessment period. IRC 6511(c). If the filer and the IRS executed a restricted consent, the filers ability to claim a credit or refund during the extended period of limitation on assessments is limited to the same item(s) covered by the restricted consent.

  6. The statute of limitations for claiming a credit or refund may be extended by agreement only by the execution of a consent to extend the statute of limitations on assessment on or before the expiration of the assessment period.

  7. The general period of limitations on claims for credit or refund is suspended during the period that an individual is "financially disabled." IRC 6511(h). Financially disabled means being unable to manage financial affairs. The inability must be due to a medically determinable mental or physical impairment. The impairment must have one of the following affects:

    • Expected to result in death.

    • Already lasted for a continuous period of not less than 12 months.

    • Expected to last for a continuous period of not less than 12 months.

  8. The filer must submit proof of the medically-determined impairment with the filer’s claim for credit or refund. The procedures for the submission are in Rev. Proc. 99-21, 1999-1 C.B. 960 (or its successor). The period doesn't include the time in which the filers spouse or any other person is authorized to act on behalf of the filer in financial matters (e.g., a guardian).

IRC 4975 Prohibited Transactions - Abstract 159

  1. A prohibited transaction is a transaction between a plan and a disqualified person prohibited under IRC 4975. A "disqualified person" is usually someone who has control over the business such as an employer.

  2. One of the most common prohibited transactions is where the employer holds on to employees' contributions to a 401(k) plan. The regulations treat this as a violation due to the use of money for the employer's benefit.

  3. The excise tax for a prohibited transaction arising from the use of money is calculated based on the "amount involved" , the greater of:

    1. The amount paid for the use for the period for which the money or other property is used.

    2. The fair market value of the use for the period for which the money or other property is used.

    Note:

    The "amount involved" isn't the actual money held on to by the disqualified person.

  4. In addition, transactions involving the use of money or other property give rise to a prohibited transaction occurring on the date of the actual transaction plus a new prohibited transaction on the first day of each succeeding tax year or portion of a succeeding tax year which is within the taxable period. Filers filing Form 5330, use the actual money held on to and apply the excise tax of 15% when filing the original Form 5330. The Form 5330 was filed incorrectly and the filer amends the Form 5330 to accurately show the use of the money apply the excise tax of 15%.

  5. Statute period for IRC 4975 tax begins the date of the related Form 5500 filing.

Working a Claim for IRC 4975 Prohibited Transactions - Abstract 159 Claims
  1. Before working the claim, take these steps:

    • Secure the original return from Files. Make two attempts to secure the original return.

    • If unable to secure the original return, include the charge out document as part of the package.

    • Verify that the filer provided the appropriate supporting evidence.

    • Validate the supporting documentation. Refer to IRM 21.5.11.20.2.1 (15) below for examples of supporting documentation.

    • Verify the filers calculations.

      Note:

      Verify filer's calculations utilizing the "Claims Calculation" program approved by Employee Plans.

  2. If you need to contact the filer, see IRM 21.5.11.20.7.

  3. If you need to contact the filer , see IRM 21.5.11.20.6.

  4. Request copies for supporting documentation.

    Example:

    Bank statements, copies of checks, supporting documentation for distributions, documentation of their calculations.

    Note:

    Don't correspond with the filer for supporting documentation that may be missing if the tax due is less than ≡ ≡ ≡ , accept the return as filed.

  5. In order to properly calculate the IRC 4975(a) tax, and if needed, the IRC 4975(b) tax, first determine whether the prohibited transaction is discrete or continuing in nature.

  6. Any prohibited transaction that is a one-time occurrence, such as a sale, is a discrete act. To calculate the excise tax on a discrete prohibited transaction, determine the amount involved.

  7. Determine the amount involved by calculating the greater of the amount of money and fair market value (FMV) of property received or given. Determine FMV by the amount for which the property could sell in the public market.

  8. Calculate excise tax under IRC 4975(a) by applying a 15% tax rate to the amount involved for each year, until the prohibited transaction is corrected. Excise tax under IRC 4975(b) is 100% of the amount involved, but it applies only if the prohibited transaction isn't timely corrected.

  9. Any repayments made are applied as of the end of the last day of the disqualified person’s tax year in the year of payment if the loan isn't repaid in full. If the loan is being repaid in full, the payment is applied as of the date the payment is made.

    Example:

    Discrete Act - Assume that Smith Corporation maintains a profit sharing plan. Assume further that on February 15, 2014, during the plan year ending 6/30/2014, Smith Corporation sold land valued at $100,000 to the plan for $200,000. Smith Corporation is a disqualified person under IRC 4975(e)(2)(C). The sale is a prohibited transaction (a discrete act) under IRC 4975(c)(1)(A). Note that this would be a prohibited transaction even if sold at fair market value. Assume that the prohibited transaction is corrected on November 30, 2016. Smith Corporation’s tax year is the calendar year.

  10. Excise tax under IRC 4975(a) would be computed as follows:

    Figure 21.5.11-21

    4975(a) Computation

    Tax Year Amount Involved Tax Rate IRC 4975(a) Tax
    12/31/2014 $200,000 15% $30,000
    12/31/2015 $200,000 15% $30,000
    12/31/2016 $200,000 15% $30,000

    Note:

    For a discrete transaction, the amount involved is the same for each tax year. Furthermore, for a discrete act, a Form 5330, is due for each year the transaction remains outstanding as of the first day of the tax year. Even if such transaction is corrected during the year, the amount involved isn't prorated. Excise tax is computed based upon the entire amount involved. In this example, Forms 5330 should be filed for three years (12/31/2014, 12/31/2015 and 12/31/2016) with each year reflecting excise tax under IRC 4975(a) of $30,000. If the prohibited transaction isn't corrected, the 100% excise tax under IRC 4975(b) would be $200,000 and assessed on the last tax period. If applicable, this excise tax is 100% of the amount involved and is in addition to IRC 4975(a) tax. In this example, IRC 4975(b) tax would not apply because the prohibited transaction was corrected.

  11. For a continuing transaction, such as a loan or lease, the prohibited transaction occurs on the date of the act and a new transaction is deemed to occur on the first day of each taxable year of the disqualified person. For continuing transactions, excise tax is calculated using a procedure called pyramiding. To calculate the excise tax, the amount involved must also be determined.

  12. For a continuing transaction, the amount involved is calculated by using the greater of the fair rental value or interest rate at the time the transaction occurs. The IRC 4975(b) tax would be calculated by using the highest interest rate over the life of the loan. As a general rule, the interest rate is the Federal Reserve Monthly Prime Rate plus 2%.

  13. Any repayments made are applied as of the end of the last day of the disqualified person’s tax year in the year of payment, if the loan isn't fully repaid. If the loan is being repaid in full, the payment is applied as of the date the payment is made.

  14. For a loan, the amount involved for each year is calculated by multiplying the loan balance by the fair market interest rate multiplied by a fraction, which is the number of days the loan is outstanding for the year divided by 365. The amount involved would then be multiplied by the tax rate of 15% to calculate the amount of IRC 4975(a) tax. A very common example would involve deferral contributions that aren't timely deposited into a plan’s trust account.

  15. Below are examples of good documentation which can be used when determining a claim:

    • We filed the original 2015 Form 5330 to reflect the 15% excise tax under code §4975 on the entire amount of our $50,000 in deferrals that were deposited 15 days late. We are correcting that amount by reflecting the appropriate amount of excise tax by calculating it on the amount involved or the amount of interest due to the plan. Originally filed: $50,000 X.15 = $7,500. Claim Calculation: ($50,000 X (.05 X 15/365)) X.15 = ($50,000 X.00205 X.15 = $102.74 X.15 = $15.41. The above documentation is considered acceptable. The Taxpayer overpaid the excise tax in the initial filing. Based on the correct calculation of the excise tax, the correct tax should be $15.41. Therefore, the difference of $7,484.59 would be abated. Unacceptable Documentation would be a statement indicating “Tax was computed incorrectly”. No supporting figures provided or indication of how it was computed wrong.

    • We filed the original 2015 Form 5330 to reflect the 15% excise tax under code §4975 on the entire amount of our $50,000 in deferrals that were required to be deposited on December 16, 2015, were actually deposited on January 17, 2016. Because the correction was completed after the year end, we realized that the excise had to be carried over until the year corrected. Below is the amount of excise tax we calculated on the interest owed for each year. The table below shows examples of the calculation and represents documentation which is acceptable. The excise tax calculated by the taxpayer is correct since the tax was properly carried to each subsequent year until the year of correction. Since the Taxpayer paid $7,500 with the 2015 filing, the credit amount of $7,484.59 would be used to offset the tax in 2015 and 2016. The remaining credit of $6,686.30 would then be refunded.

      Note:

      Unacceptable documentation would be a statement indicating “Tax was computed incorrectly” and no supporting figures provided or indication of how it was computed wrong.

      Figure 21.5.11-22

      Example of Tax Calculation

      Total/Taxable Period 2015 2016
      December 31, 2012 $375.00 $375.00
      December 31, 2013   $17.47
      Total Excise Tax $390.41 $407.88
  16. Below are examples of unacceptable documentation:

    • Statement indicating a prohibited transaction didn't occur without reasons why it was not a prohibited transaction.

    • A statement that excise tax was computed on the loan amount instead of the interest but no calculations included to support the amended return.

    • Statement the individual involved was not a disqualified person without supporting documentation of who the individual is and why they should not be considered a disqualified person.

  17. The Department of Labor has a web page at http://askebsa.dol.gov/VFCPCalculator/WebCalculator.aspx which may assist you in computing the amount involved. This web page uses the Underpayment Rates as shown in IRC 6621 for the periods entered.

IRC 4980 Reversion of Qualified Plan Assets to an Employer - Abstract 204

  1. When a pension plan is over funded at the time of termination, excess assets may be returned to the employer if the plan so provides. The excess assets are determined after the satisfaction of all liabilities to participants and their beneficiaries. The Employer is required to report the reversion on Form 5330, by the last day of the month following the month in which the reversion occurred. The excise tax is 50% of the reversion amount.

  2. The Employer may be eligible for a 20% excise tax rate instead of the 50% rate if one of the following occurs:

    • The employer establishes or maintains a qualified replacement plan following the plan termination and at least 25% of the reversion amount is transferred to this plan before the reversion. Also, at least 95% of the employers employees are participating under the new plan.

    • As of the termination date of the qualified plan, the employer is in bankruptcy liquidation under Chapter 7 of Title 11 of the United States Code or in similar proceedings under state law.

    • The employer provides certain pro-rata benefit increases in connection with the plan termination.

    • If the Employer uses an excise tax rate other than 50%, the employer is required to explain why they qualify to use a rate other than 50%. This must be part of his supporting documentation. IRM 21.5.11.20.5 for additional information on "Supporting Documentation" .

      Note:

      Do not correspond with the filer for supporting documentation that may be missing if the tax due is less than ≡ ≡ ≡ , accept the return as filed.

  3. Send letter to filer. IRM 21.5.11.20.7

Working a Claim IRC 4980 Reversion of Qualified Plan Assets to an Employer - Abstract 204
  1. Before you work a claim, follow these steps :

    • Secure the original return from Files. Make two attempts to secure the original return.

    • If unable to secure the original return, the charge out document will be part of the package.

    • Verify that the filer has provided the appropriate supporting evidence. IRM 21.5.11.20.5

    • Validate the supporting documentation.

      Note:

      Don’t correspond with the filer for supporting documentation that may be missing if the tax due is less than ≡ ≡ ≡ ≡ ≡ ≡ , accept as filed.

    • Verify the filer’s calculations.

  2. If additional filer contact is needed, IRM 21.5.11.20.7

  3. If no filer contact is needed, IRM 21.5.11.20.6

IRC 4971 Minimum Funding Deficiencies - Abstract 163

  1. A Minimum Funding Deficiency exists whenever an Employer fails to contribute the required funding for the plan which is a Defined Benefit Plan by the funding deadline.

  2. The funding deadline is the 15th day of the 9th month following the plan year end.

  3. In most cases, the liabilities resulting from either Reversions or Minimum Funding Deficiencies will generate large dollar adjustments.

Working a Claim IRC 4971 Minimum Funding Deficiencies - Abstract 163
  1. Before you work a claim, take these steps:

    • Secure the original return from Files. Make two attempts to secure the original return.

    • If unable to secure the original return, the charge out document will be part of the package.

    • Verify that the filer has provided the appropriate supporting evidence. IRM 21.5.11.20.5

    • Validate the supporting documentation.

      Note:

      Don’t correspond with the filer for supporting documentation that may be missing if the tax due is less than ≡ ≡ ≡ ≡ , accept the return as filed.

    • Verify the filer's calculations

  2. If additional filer contact is needed, IRM 21.5.11.20.7

  3. If no filer contact is needed, IRM 21.5.11.20.6

Supporting Documentation

  1. If an amended return to claim a refund or credit is filed, the claim "MUST" state in detail the reason(s) for claiming the refund and provide the appropriate supporting evidence. See Regulations section 301.6402-2 for additional details.

    Note:

    Don’t correspond with the filer for supporting documentation that may be missing if the tax due is less than ≡ ≡ ≡ ≡ ≡ ≡ , accept the return as filed.

  2. The following are recommended guidelines for "the appropriate supporting evidence:"

    Figure 21.5.11-23

    Guidelines for Appropriate Supporting Evidence

    IRC 4975 Prohibited Transactions - Abstract 159 Claims Detailed breakdown of the original calculations initially computed and the revised computations.
    Working a Claim IRC 4971 Minimum Funding Deficiencies - Abstract 163 Canceled check(s) and bank statements showing payment of the funding deficiency.
    IRC 4980 Reversion of Qualified Plan Assets to an Employer - Abstract 204 List of names of participants enrolled in new plan
    Proof that a new plan was established, ie adoption agreement.
    Bank Statements or cancelled checks showing proof the 25% funding going into the new plan.

Claims Allowed in Full, No Filer Contact

  1. After you get the original return, verify that all of the appropriate documentation was provided and don’t need to contact the filer, proceed as follows:

    Note:

    Don’t correspond with the filer for supporting documentation that may be missing if the tax due is less than ≡ ≡ ≡ ≡ , accept the return as filed.

    • Input TC 29X or appropriate credit adjustment

    • Use Blocking Series 15 for BMF without the original return or Blocking Series 00 with the original return.

    • Prepare Manual Refund if account is in credit status, IRM 21.5.11.22

    • Close Control

Processing a Claim When filer Contact is Needed

  1. If you need to contact the filer (or POA) to obtain additional information, proceed as follows:

    • Send letter 0324C using the appropriate paragraphs.

    • Suspense case for 45 days, this allows 30 days for the filer to respond

  2. If filer doesn't reply, annotate on the history sheet, "NO REPLY" and work the claim as a "No Consideration." IRM 21.5.11.20.8

  3. When filer provides you the additional information, work claim as a Claims Allowed in Full, No filer Contact. IRM 21.5.11.20.6

No Consideration and Disallowance of Claims

  1. Send appropriate disallowance letter 105C/106C, or no consideration letter 916C to advise the filer why we can't consider the claim.

    1. Input a TC 290 for zero in the appropriate blocking series.

    2. File the claim, or amended return and a copy of the no consideration letter with the original return if the original return was filed electronically, associate the copy of the no consideration letter with the adjustment DLN.

  2. All claim disallowance letters must contain the specific reason for the claim disallowance. Appeal rights and the right to file suit should also be included. An IRC section should be cited if known and appropriate.

  3. See IRM 20.1.1.4, Methods of Appealing Penalties, for appeal claim procedures and IRM 21.5.3General Claims Procedures, for additional information.

How to Determine if Claim Should be Disallowed
  1. Review claim and determine:

    Figure 21.5.11-24

    Determination to Disallow Claim

    If... Then...
    issue being considered isn't allowable based on law or regulation Disallow the Claim, and send 105C, or 106C letter. Include appeal rights.
    claim not filed timely
    1. Disallow as instructed in IRM 21.5.11.20.8.

    2. Send 105C or 106C letter include appeal rights and the right to file suit.

    filer requests an immediate disallowance of a claim
    1. Disallow claim as instructed in IRM 21.5.11.20.8.

    2. Send 105C or 106C letter include appeal rights and the right to file suit.

    3. Advise the filer you disallowed claim based upon their request.

  2. A request for an abatement is a request for reduction of tax, penalty, and interest that has not been paid. This includes penalty adjustment requests. If this type of abatement request isn't considered, send the letter via regular mail.

    Note:

    Request for abatement should not be denied consideration solely for non-payment of tax. Process under normal adjustment procedures unless it meets Examination criteria.

  3. These procedures are for general claims only. For requests for abatement of interest, follow the procedures in IRM 20.2.7 Abatement and Suspension of Debit Interest. .

  4. Only disallow claims if you’ve contacted filers for any missing information.

Claims worked by EP Classification

  1. When you receive a Form 5330, claim for refund in EP Accounts, prepare a complete claim package or case file and prepare Form 5597 for AIMS input and establishment before routing the claim to the EP Classification Coordinator.

  2. Prepare the claim package:

    • Secure the original return from Files, two attempts will be made to secure the original return

    • If unable to secure the original return, the charge out document will be part of the package.

    • Prepare the Form 5597.

    • Close your control as "EP AGENT"

    • Sent 086 C informing the filer that we sent the request to:
      EP Classification Coordinator,
      9350 Flair Dr., 4th Floor
      El Monte, CA 91731–2885
      626-927-1427

    • Establish on AIMS

    • Attach case history sheet.

    • Forward the entire package to the TE/GE program analyst who oversees the project, Mail Stop 1110 via Form 3210 and Form 12634.

      Note:

      If "NO" supporting documentation or explanation was provided follow the amended return procedures.

  3. After you send the initial claim package to the field, EP Accounts has no further actions.

Bankruptcy Cases - Insolvency’s Responsibilities and Authority

  1. Responsibilities - Field Insolvency and the Centralized Insolvency Operation (CIO) implement bankruptcy policy guidelines, control and monitor bankruptcy cases for the IRS, and take appropriate case actions on all of the bankruptcy cases assigned to Insolvency.

  2. Authority - Insolvency employees have delegated authority to:

    • Prepare and file proofs of claim.

    • Refer bankruptcy case actions to the Department of Justice or the US Attorney’s Office, either directly or through local Counsel.

    • Resolve bankruptcy issues administratively.

  3. Contacts- Insolvency employees deal directly with Associate Area Counsel (SB/SE), Department of Justice, Assistant US Attorneys, bankruptcy court employees, trustees, debtors and their attorneys, and IRS employees in other functions throughout the IRS.

  4. Advice and Guidance - Insolvency personnel are trained in specific areas of bankruptcy law that deal with tax administration and debtor protection. When confronted with bankruptcy issues beyond the scope of their knowledge and expertise, they are to seek guidance from the local Counsel office.

  5. Directions from Insolvency - Insolvency employees provide directions on bankruptcies to other IRS functions. When IRS personnel contact Insolvency regarding a bankruptcy-related issue, they should comply with the advice and guidance given by Insolvency. If additional assistance is required, Insolvency employees will contact Counsel on behalf of other IRS employees. (See IRM 5.9.1.3, The Role of Insolvency.)

  6. For additional information or clarification on significant processing Bankruptcy procedures refer to IRM 5.9.4.

Manual Refunds

  1. A Manual Refund is a refund that isn't generated by normal computer processing. The request of a refund by usng Form 3753, Manual Refund Posting Voucher and a Form 5792, Request for IDRS Generated Refund, are commonly referred to as Manual Refunds. ALL requests for manual refunds must be controlled and monitored by the initiator (or other management designated employee) to prevent duplicate, erroneous refunds.

  2. Manual refund is exception processing and has a greater margin for error. When possible, allow the IRS computer system to generate the refund via TC 846.

  3. Employees from all functions can initiate requests for manual refunds. The Accounting Function of the Submission Processing Campus schedules and certifies refunds.

  4. This IRM provides information on manual refunds for EP and actions needed to initiate a refund. See IRM 21.4.4, for more information on manual refunds.

    Note:

    Form 5330, does qualify for the GATT interest rate if organization is a corporation.

What Research is Needed

  1. Before sending a request for a manual refund to the Accounting Function, thorough research must be completed. If the refund is being prepared for the Bureau of Public Debt, no research is required.

  2. Failure to perform complete research, or if supporting documentation isn't provided when the manual refund is submitted to the Accounting Function, the manual refund request will be rejected back to the originator.

Outstanding Balances/Duplicate Refunds
  1. Tax offset capability is lost when a manual refund is issued. Ensure the filer has no outstanding tax liabilities that must be satisfied. Initiators must review the account using universal IDRS research. Ensure that there are no prior, duplicate, manual (TC 840) or generated refunds (TC 846) issued at any campus for the credit you are refunding. Research all related accounts using appropriate command codes the same day a manual refund is prepared to verify that a duplicate refund won't be issued.

  2. You must verify that the claimed credit (payments) are available for refund. Research for any open control bases and coordinate as needed. The first two digits of the employee IDRS number (Office Identifiers) will identify the employee’s location. Refer to Document 6209 for a list of office identifiers.

  3. Research all records of accounts, including:

    • IMF

    • BMF

    • NMF

    • IRAF

Refund Statute Expiration Date
  1. Time for Filing a Claim for Credit or Refund —--- Generally, a claim for a credit or refund must be filed within 3 years from the filing of the return or 2 years from the payment of tax, whichever is later. See IRM 25.6.1 for further explanations

  2. An original delinquent return claiming an overpayment is a claim for refund. A taxpayer is entitled to a credit/refund for any payment paid within three years from the received date of an original delinquent return, including extensions.

    Note:

    There are conditions that extend the RSED, see IRM 25.6.1.

    Note:

    Taxes withheld from wages during the calendar year are deemed paid on the 15th day of the fourth month following the close of the tax year. In addition, estimated income tax is deemed paid on the due date for filing the return (not including any extension of time for filing).

  3. Expired credits aren't to be used to offset liabilities for other tax periods.

  4. ASFR Returns and Reconsiderations are original returns. Generally, prepaid credits must be claimed within 3 years of the due date of the return with regard to extension. Therefore, if an ASFR return or Reconsideration is received more than three years from the due date with regard to extensions, a refund of prepaid credits should not be made.

    Note:

    There are conditions that extend the RSED, see IRM 25.6.1.

  5. Generally, the amount to be credited or refunded is limited to the tax paid during the three years immediately preceding the filing of a claim, plus the period of any extension of time to file. Therefore, even if prepaid credits are barred, available credits paid within three years of the received date of ASFR returns and ASFR Reconsiderations, aren't barred.

    • Do not allow any overpayment of prepaid credits or subsequent payments to refund or offset if the RSED has expired.

    • Follow disallowance procedures in IRM 25.6.1.

    Note:

    Do not solely rely on the RSED posted to TXMODA to determine if credits should be offset or refunded.

  6. When barring a refund, take the following actions:

    • Issue certified notice of Claim Disallowed,IRM 105C when delinquent returns are received with refunds barred by the statute of limitations.

    • If a notice of claim disallowance isn't sent by registered or certified mail to the taxpayer, the refund claim on the original return isn't properly disallowed per IRC 6532 , and the statute of limitations for filing a refund suit has not expired, IRC 6532(a)(1) .

    • Prepare Form 8758 with as much information as possible at the time the adjustment is input. Form 8758 is used to transfer the barred credit from the module to Excess Collections.

    • Submit 8758 for processing within five business days of the adjustment posting.

    Note:

    For balance due returns, where subsequent payments are barred, it won't be possible to complete box #7 until the adjustment has posted

  7. Input TC 971 AC 296 on IDRS using CC REQ77 to indicate the transfer of the expired credit to XSF.

  8. DO NOT resolve credit balances on partial assessments until final closure.

  9. If the RSED has expired it isn't needed to cycle the balance due years first. When you receive multiple years from the same taxpayer, process all years at the same time.

  10. See IRM 25.6.1.7.3.1 for additional instructions on transferring credits to XSF

Non Master File Research
  1. Research non master file MFT 74 & 76 account (NMF) to determine if there is a NMF account. When research shows a manual refund is needed, contact the Non master file Function to request a transcript of all open NMF accounts.

    Note:

    Agreement was made with NMF to use print screens for MFT 74 & 76.

  2. Consider any outstanding balances or prior TC 840s when determining the amount of the manual refund which can be initiated. The refund amount may be reduced or not approved if there are NMF debts.

  3. If research indicates the TP is eligible for all or a portion of the refund, attach the NMF transcript to the Form 3753 , with an explanation of why it qualifies for a manual refund (Sec III, Form 3753).

IDRS History Item

  1. Establish an IDRS History Item, 5792 to SC Acct., via CC ACTON, to alert employees that a manual refund is in process.

Follow-Up

  1. Follow-up to ensure the manual refund was issued and the proper posting of credits to master file. Verifying that the credit posted ensures the filer isn't billed erroneously and prevents a duplicate refund being issued.

  2. Monitor accounts weekly (Monday-Wednesday) until the manual refund (TC840) posts to master file and the account is in "0" balance. It may take 4-6 weeks for the TC 840 to post when issued via Form 3573.

  3. If the manual refund has not posted to ANMF for the Form 5500 account within 20 days, contact the Manual Refund Unit lead or manager to resolve the non-posting.

    Note:

    DO NOT prepare a duplicate request without complete research and managerial approval.

  4. Continue to work the case after the TC 840 posts, or, if the only action requested was the manual refund, close the IDRS control base.

Form 5792 - IDRS Master File Manual Refund

  1. Form 5792 is used to request an IDRS master file manual refund whenever possible.

    Note:

    Refunds of less than one dollar can be processed via Form 5792 You don’t need to use Form 3753 .

  2. After completing Form 5792, the Team Lead will review and initial the form verifying that the manual refund is appropriate, that the research is complete, and the form is completed accurately. The Approving Official’s signature certifies to the Accounting Function that the form was reviewed and is correct.

  3. Complete the Form 5792 as follows:

    1. Section I, Block 1, enter the filer Identification Number (TIN) and File Source of the account from which the refund will be issued.

    2. Block 2, enter the master file Tax Code (MFT).

    3. Block 3, enter the tax period as YYYYMM, Exception: period ending for MFT 52 is always 000000.

    4. Block 4, enter the plan number if applicable.

    5. Block 5, enter the name control.

    6. Block 6, enter the TC 840 amount: overpayment, plus allowable interest.

    7. Block 7, enter the TC 770 amount: credit interest due the taxpayer.

    8. Block 8, enter the overpayment amount: The amount being refunded, less allowable interest.

      Note:

      Consider previously assessed failure to file and failure to pay penalties, and underpayment interest that will be affected by the adjustment action. Any decrease in penalties or interest already paid must be included in the overpayment amount. In addition, unassessed accruals of penalty and/or interest may reduce the overpayment amount.

    9. Block 9, Line Number - Refer to IRM 3.17.41, Accounting and Operating Reports, for appropriate number.

    10. Block 10, Interest indicator must be entered. If interest is paid, an interest "from" date is required. Use an " N" for normal interest when interest is payable. Use an "0" for no interest. Use an "R" for restricted interest.

      Note:

      If no interest is paid on a reissued refund, use indicator "0" . See IRM 20.2.4, Overpayment of Interest, for interest computation information.

    11. Block 11, enter the Universal Location Code, see 6209, Section 8 for listing of ULCs.

    12. Block 12, to be completed by the person who inputs the REFUND command code to IDRS. (Employee’s IDRS number).

    13. Block 13, completed by the person requesting the manual refund. (Employee IDRS number or badge number if not an IDRS user).

    14. Block 14 - 19, enter the name and address of the payee. Print using capital, block letters. Use the ENMOD or INOLES information unless there is a name change, different address, or the refund is being issued to an injured spouse or third party.

    15. Block 20, annotate reason for the refund in the remarks field. Be specific.

    16. Block 21, check the box indicating the initiator's BOD.

    17. Block 22, enter the document locator number (DLN) of the return or the credit.

      Note:

      If the only DLN available is that of an electronically filed return, leave this field blank.

    18. Block 23, check box if it is a bankruptcy case.

    19. Block 24, check if TC 130.

    20. Section II, Block 1, enter reason for manual refund.

    21. Block 2, check if there is a TC 420/424 on the module.

    22. Block 3, indicate all research is complete.

    23. Block 4, check if transcript of debit accounts is attached.

    24. Block 5, check the appropriate block.

    25. Block 6, check and attach documentation.

    26. Block 7, check and verify amount.

    27. Block 8 - 13, complete as applicable.

    28. Section III, the Preparer must complete all interest for the TC 770 amount.

    29. Section IV, check all appropriate blocks on form.

    30. Block 1, enter the IDRS employee number of the employee inputting the CC RFUND.

    31. Block 2 - 3, enter the employee IDRS number or the Badge ID number and phone number of the initiator of the request.

    32. Block 4, 4a - 5, the Approving Official must sign and date. The Approving Official must be on the authorized list maintained by the Manual Refund Unit in the Accounting Function.

  4. A copy of the interest computation, (COMPA, DMI/ACT) should be attached to Form 5792.

Form 3753 - Manual Refund Posting Voucher

  1. Form 3753 , Manual Refund Posting Vouchers, is used to refund NMF accounts that aren't on IDRS.

  2. After completing Form 3753, the Team Lead will review and initial the form verifying that the manual refund is appropriate, that the research is complete, and the form is completed accurately. The Approving Official signature certifies to the Accounting Function that the form was reviewed and is correct.

  3. Complete the Form 3753 as follows:

    1. DLN of Form 3753 - For Refund function use only

    2. From and Return To - Originating Section and Branch symbols and mail stop, e.g. AM:TPR:EP Unit Mail Stop 6270

    3. Section I, Block 1 - TIN (EIN/SSN)

    4. Block 2 - Period Ending, and the 3 digit plan number, ie YYYYMM / PPP

      Note:

      Plan Number (PPP) is a MUST on all EP accounts requests

    5. Block 3 - MFT, always MFT 74 for Form 5500 series

    6. Block 4 - Schedule Number - For Refund Function Use Only

    7. Block 5 - Schedule/Transaction date - For Refund Function Use Only

    8. Block 6 - Name and address of filer

    9. Block 7 - Form Number

    10. Block 9 - Transaction Code, block (b) Amount of Check and block (d) Interest if applicable

    11. Block 10 - Complete only if payee is other than the filer, or if the refund is being issued to a different address

    12. Block 11 - Enter IDRS number of originator

    13. Block 12 - Amount of overpayment

    14. Block 13 - Originator’s complete telephone number

    15. Block 14 - Line Number - Refer to IRM 3.17.41 for list of numbers. The number must reflect what has caused the refund.

      Note:

      Consider previously assessed failure to file and failure to pay penalties, and underpayment interest that will be affected by the adjustment action. Any decrease in penalties or interest already paid must be included in the overpayment amount. In addition, unassessed accruals of penalty and/or interest may reduce the overpayment amount.

    16. Section II, Block 1 - Mark appropriate check box

    17. Block 2 - Authority - Appropriate IRM reference, or other authority

    18. Block 3 - Check appropriate check box or enter explanation

    19. Block 4 - Check appropriate check box

    20. Section III, Check appropriate box(es)

    21. Section IV, Interest computation. Enter dates, as appropriate.

    22. Section V, Any additional information needed to explain actions

      Figure 21.5.11-25

      Remarks on Form 3753

      Remarks for... will be...
      Manual Refund from Unpostable Credit Listing with TC 840
      abatement of penalty
      Manual Refund with F1331-B with TC 840
      abatement of penalty
    23. Annotate the appropriate DO code on the top of the F3753. The DO code will be written in the center of the page, above the solid line of "Manual Refund Posting Voucher" box.

    24. District Code - (e.g. DO - 31)
      Filer's address is Michigan, District Code is 38 = DO 38
      Filer's address is Indiana, District Code is 35 = DO 35
      All others' District Code is 31 = DO 31

    25. Sort in DO order

    26. Indicate DO in remarks field of the F3210

    27. Section VI, Approval. Must be the signature of an authorized official who has a sample signature on file in the Refund function. Must include title and date refund approved

    28. Update IDRS, and DI/AMS with history item, 3753PREP

    29. Input history on NMF for all accounts on NMF database - input remarks "F3753 sent and the date it was sent" .

  4. Attach supporting documentation to the F3753 as follows for Form 5500 (MFT 74) NMF manual refunds:

    Figure 21.5.11-26

    Refund Information

    Type of Manual Refund Required Documentation
    Manual Refund from Unpostable Credit List Attach:
    • Print of unpostable credit list with account circled

    • Print of BMFOLI or SUMRY

    • Print of DMI/ACT,

    Manual Refund with F1331-B Attach:
    • Print of BMFOLI or SUMRY

    • Print of DMI/ACT

    • Print of the ANMF transcript or screen print that shows the credit which needs to be refunded

Research

  1. Tax Examiners should be familiar with the research tools available, including how and when to use the different methods and systems. Due to the complexity of EPMF, thoroughly research EPMF and BMF before taking any action.

  2. Tax examiner’s responsibility: Know which research tool(s) to use in each situation to obtain the required information.

    1. Research the filer Information File (TIF) using Command Code ENMOD, TXMOD and SUMRY for pending transactions and case control information that is on IDRS.

    2. Research the National Account Profile (NAP) using Command Code INOLE. This command code displays abbreviated entity data that was extracted from the master file.

    3. Research the EPMF with Command Code EMFOL.

    4. Research the EPRTF with Command Code ERTVU.

    5. Research the BMF with Command Code BMFOL.

    6. Research the EFAST2 website for returns processed by the vendor.

    7. Research and input to the DI/AMS system.

    8. Research NMF database located at Philadelphia and CSPC.

  3. Input instructions and the use of ENMOD, INOLE, EMFOL, TXMOD, SUMRY, NAMEB, UPTIN and ERTVU are explained in IRM 2.3, IDRS Terminal Responses.

IDRS Research Tools/Command Codes

  1. Use IDRS Research Tools/Command Codes (CCs) to research Business master file (BMF) and Employee Plans master file (EPMF). The following sections tell you how to use CC’s for EPMF account resolution. For additional information refer to IRM 2.3 IDRS Terminal Responses and IRM 2.4 IDRS Terminal Input.

Command Code BMFOL

  1. CC BMFOL provides on-line research of nationwide entity and tax data information posted to the BMF. BMFOL allows expanded research capability and displays an index (summary) of tax modules showing the tax year available. The screen contains nationwide information including entity, posted returns, generated tax data, status history, adjustment, and audit history data for specific TIN. The BMF contains information provided via weekly computer tapes submitted from each campus. Several validity checks are performed before posting the information to the BMF. The BMF is updated every Thursday morning.

    1. Definer "E"

    2. Definer "I"

    3. Definer "T"

    4. Definer "R"

Command Code EMFOL

  1. Use CC EMFOL to research posted EP master file information. This file is updated weekly as the master file itself is updated. The definer you use with EMFOL depends on the type of information you need.

    1. Definer "D" with a plan number to view the Plan Administrator Screen. Use this screen to research the administrator EIN, name, address, and telephone number associated with a particular plan.

    2. Definer "E" - to view the Filer Entity Screen. This screen displays the sponsor's name and address, name control, CAF indicator and all transactions associated with the sponsor's entity module. This screen also displays the prior primary name for name change transactions, and XREF EIN for account consolidations.

    3. Definer "I" - to view an index. The index displays all plan numbers, plan names and tax periods on the record for a particular sponsor EIN. This screen also indicates whether a TC 150 has posted for a particular plan number and plan period and whether there is a record on CC ERTVU for the return.

    4. Definer "T" - With a plan number and plan period ending to view the Tax Module Screen. This screen displays the controlling DLN and all transactions associated with a particular tax module.

Command Code ERTVU

  1. Use CC ERTVU to research the Return Transaction File. It is updated weekly. It displays most of the information, including the Edit Sheet, as well as some generated data.

  2. When researching an older plan period return (plan years through 199911), always research EMFOL first to determine the current information about the return posting. You may be need to request the original document in some of these cases if the most current return isn't available in ERTVU.

  3. To view data before the past two years, use the EP Return Information Classification System (RICS).

  4. For returns processed by EFAST, use a return status code.

    • "C" - used for a current return record. This will be the latest completed processing return record posted to that tax period. If there’s an amended return posted, it will be the current return record.

    • "H" - use for the historical return record. If an amended return has posted, you can use the historical record to view the original posted return.

    • "I" - use for viewing the interim return record. This is a return that is in correspondence status at EFAST. It hasn’t completed processing and isn't posted to the master file.

    • "U" - use for viewing an Unpostable return record.

  5. Input command code ERTVU with an EIN, plan number, plan period and definer code. Use a blank definer for Forms 5500, Form 5500-SF and 5500-EZ (5500C, 5500R Pre-EFAST only).

  6. The first page of each return screen contains the information from the Edit Sheet, a line number index, and a list of what schedules are present for that return.

  7. The following is a list of definers that you can use with ERTVU:

    Definer To view
    N Index
    A Scheduled A (for 1993 and later returns)
    B Schedule MB/SB
    C Schedule C
    D Schedule D
    E Schedule E (eliminated for the 2009 and later plan years)
    F Schedule F
    G Schedule G
    H Schedule H
    I Schedule I
    P Schedule P
    R Schedule R
    SSA Schedule SSA (replaced with a separate Form 8955-SSA, Annual Registration Statement Identifying Separated Participants with Deferred Vested Benefits)
    T Schedule T
    W Form 8955-SSA Return
    X Schedule X
    Z resurrect deleted EFAST returns
       
       
  8. If you determine an EFAST return was deleted erroneously, based on incomplete or missing information, it can be resurrected by using CC ERTVU definer "Z" . Input CC ERTVUZNN-NNNNNNNDPPPYYYMM, the next screen will display the following message, Data Accepted, Record will be updated in the next processing cycle. Once the data is resurrected make the needed changes to correct the account and post the return.

  9. CC ERTVU is strictly for EPMF accounts; therefore, File Source "P" isn't required. The figure below is a list of definer codes and other criteria which should be used for ERTVU requests.

    Figure 21.5.11-27

    ERTVU Definer Codes

    Definer Used Plan Number Required PYE Required Screen Information
    Blank Yes Yes Return
    A Yes Yes Schedule A, Insurance Information
    B Yes Yes Schedule MB/SB, Actuarial Information
    C Yes Yes Schedule C, Service Provider and Trustee Information
    E Yes Yes Schedule E, ESOP Annual Information
    F Yes Yes Schedule F, Fringe Benefit Plan Annual Information

Command Code INOLE

  1. The CC INOLE accesses the NAP with a definer code and TIN. See IRM 2.3.47, IDRS Terminal Response, for additional information.

  2. The definer code determines whether the input TIN is edited or not edited and whether a file source is needed.

  3. Use Definer Code "T" with CC INOLE:

    • If the TIN is on more than one master file and the filer name and address.

    • The plan numbers for EPMF accounts.

  4. Definer Code "S" is used for specific accounts.

Command Code TXMOD/SUMRY

  1. Use CC TXMOD to request a display of the tax module information for a specific tax period on the TIF. The display consists of entity data, posted returns, posted transactions, pending transactions and reject data and is available on IDRS TIF. Transaction DLNs are shown if CC definer D or L is input. A command code definer is required for CC TXMOD.

  2. Definer "A" displays most tax module information present on the TIF. See IRM 2.3.11 for detailed explanation for input.

  3. CC SUMRY is used in tax account research Use it normally as a first contact with IDRS because it provides an overall display of the filer’s account by giving a summary of all tax modules on IDRS for a specific EIN.

Command Code ENMOD

  1. Use CC ENMOD to research the sponsor entity to find the name, address and thorough entity information from input of the TIN. See IRM 2.3.15, IDRS Terminal Responses for additional Information.

  2. ENMOD also shows any pending changes to the sponsor entity and any pending plan information, unpostable or reject conditions, account merges, delays and correspondence history.

Command Code NAMES and NAMEI/NAMEE and NAMEB

  1. Name Search Facility (NSF) will allow IDRS users to query a national file of name and address data at Martinsburg Computer Center (MCC) using a filer name and address to locate a Social Security Number (SSN) or Employer Identification Number (EIN). The NSF contains the full filer name as it was filed on a return. It maintains multiple addresses for each filer name. The NSF is kept current with real-time updates and daily and weekly batch updates. CCs NAMEB/NAMEI are the primary method to access the NSF. See IRM 2.3.60 for additional information.

    • CC NAMES and CC NAMEI will search for SSNs

    • CC NAMES and CC NAMEI will search for both primary and secondary filer names.

    • CC NAMEE and CC NAMEB will search for EINS.

    • CC NAMEE and CC NAMEB will search for both primary and "doing-business-as (DBA)" names.

  2. use CC NAMEB with a CC Definer

    • B - Only BMF records are displayed

    • E - Only EPMF records are displayed

    • N - Only NMF records are displayed

    • X - A hardcopy listing is desired

Plan Number

  1. A plan number is a three digit number assigned by the plan sponsor to differentiate between plans which are, or may be, established or maintained by the same plan sponsor, as shown in the table below:

    Figure 21.5.11-28

    Plan Type and Number

    If the Plan is a: Then the plan number starts with:
    Pension Plan 001–500
    Welfare Plan 501–999
    Fringe Benefit Plan 501–999
    Form 5500 - EZ 001–500
    Multiple-employer Plan (Other) plan 333–339 (Pre EFAST only)
    Direct Filing Entity (DFE) - other than GIAs 001–500
    Group Insurance Arrangements (GIAs) 501–999
  2. Once assigned, the same number MUST be used consistently to identify the same plan.

  3. If a plan is terminated, its number can't be used for any new plan. Instead, they should use the next available higher number for the new plan.

  4. If a sponsor has more than 500 of either type of plan, a second EIN is assigned. This EIN will state "Second EIN for plans" in the sponsor entity line on IDRS.

  5. The plan number along with the plan name identifies a plan from other plans for a given sponsor.

  6. The plan name, plan number, the type of return filed and the plan month ending make up the plan entity. As long as the plan is in effect the numbers will stay the same although the name may change.

Correspondence

  1. Use this IRM section as a reference guide for the letters and notices that EP Accounts unit generates when working the Form 5500, Annual Return/Report of Employee Benefit Plan and Form 5330, Return of Excise Tax Related to Employee Plans, returns.

  2. The following is a list of available letters with their suggested uses. The list isn't all inclusive, nor is it indicating that you can use only these letters and notices. You determine the one best suited to the particular situation and to choose the appropriate paragraphs.

  3. Form 5500 - Annual Return/Report of Employee Benefit Plan;

    1. CP 214 - Form 5500-EZ Reminder Notice

    2. CP 220 - Audit/DP Tax Adjustment

    3. CP 283 - 1st Notice BMF - Assessment on BMF

    4. CP 295 - Annual BMF Balance Due notice

    5. Form 6335 - 1st Notice ANMF - Assessment was established on ANMF

    6. Form 4840 - 4th Notice ANMF - Notice received 6 cycles after the 1st notice

    7. 0064C - Penalty and Interest Explained - Use to inform the filer of his balance due.

    8. 0168C - Penalty Removed or Reduced - Reasonable Cause Established

    9. 1382C - Penalty Removal Request Incomplete - Use when asking for additional information

    10. 2645C - Interim Letter - Use when additional time is needed to resolve case.

    11. 3064C - IDRS Special Letter (CNote) Management approval is required.

  4. Form 5330 - Return of Excise Taxes Related to Employee Benefit Plans

    1. CP 220 - Audit/DP Tax Adjustment Notice

    2. CP210 - Audit/DP Tax Adjustment Notice, (Overpaid, Even, or Balance Due)

    3. 0064C - Penalty and Interest Explained - Use to inform the filer of the balance due.

    4. 0086C - Referring Filer Inquiry/Forms to Another Office

    5. 0167C - Misapplied Payment

    6. 0168C - Penalty Removed or Reduced - Reasonable Cause Established

    7. 1382C - Penalty Removal Request Incomplete - Use when asking for additional information

    8. 2645C - Interim Letter

    9. 3024C - Math Error Explained (BMF)

    10. 324C - Additional information is needed from filer to process his claim request

  5. If you are suspending or need additional information use your name and direct telephone number. Use 877-829-5500 for all other correspondence for Form 5500 series or Form 5330.

  6. All TE/GE "C" letters have the toll free number hard coded in the selective paragraphs. If you are issuing a letter for a TE/GE return and the letter doesn't have the toll-free number hard coded in the paragraph, use EXTREME caution that you type the correct number, 877-829-5500. If you need to type the entire paragraph, it should read: "If you have any questions, please call us toll free at 877-829-5500" There is an IAT Letters Tool Job Aid at http://iat.web.irs.gov/JobAids/Letters2.xml

Service Level Agreements

  1. National Service Level Agreements (SLAs) have been established between Operating Divisions. This section contains specifics regarding SLAs that pertain to activities performed by use of this IRM.

National Taxpayer Advocate Service Level Agreement

  1. The National Taxpayer Advocate Service (TAS) has reached agreements with the Commissioners of Wage & Investment (W&I), Small Business & Self-Employed (SBSE), Tax Exempt & Government (TEGE), Criminal Investigation (CI), Appeals and LBI Divisions which outline the procedures and responsibilities of TAS casework when either the statutory or delegated authority to complete case transactions rests outside of TAS. These agreements are known as Service Level Agreements (SLAs).

  2. The SLAs are located at SLAs under the heading Policy/Procedures Guidance. Find Local agreement and procedures in IRM 13, Taxpayer Advocate Service.

Operations Assistance Requests (OARs)

  1. The Taxpayer Advocate Service uses the Operation Assistance Request (OAR) process to refer cases when TAS lacks either the statutory or delegated authority to resolve a taxpayer’s problem. The TAS uses Form 12412, Taxpayer Advocate Service Assistance Request , to initiate the OAR process.

  2. To prepare a case being referred to an SB/SE or TEGE Division function, the TAS employee :

    1. Prepares Form 12412, Operations Assistance Request.

    2. Secures all necessary supporting documentation.

    3. Identifies cases that require expedite processing. Cases don’t automatically receive expedite processing. We identify expedite processing on a case-by-case basis.

    4. Sends Form 12412 and documentation to the SB/SE or TEGE Business Unit Liaison.

  3. SB/SE or TEGE Division responsibilities:

    1. Assign a liaison in each office or Campus where a Taxpayer Advocate is located.

    2. Acknowledge receipt of the case within one workday for cases requiring expedite processing or within three workdays for all other cases.

    3. Give TAS the assigned group managers or employee’s name and telephone number. The manager/employee assigned the case discusses their findings and recommendations on the final disposition of the case with the TAS contact. The TAS contact communicates the final decision on the case to the taxpayer before closing or rejecting the OAR. However, this doesn't prohibit the manager/employee from also doing so.

    4. Determine a reasonable time frame for case resolution. If the TAS contact and the manager/employee assigned the case can't agree on how to resolve the taxpayer’s problem, the TAS employee elevates this disagreement to his/her manager who discusses it with the appropriate Operating Division manager. The manager/employee assigned the case elevates any disagreement to his or her manager.

    5. When closing the OAR, the employee assigned the OAR completes Form 12412, Section VI and returns it to the TAS employee assigned to the case. The employee assigned the OAR must return the Form 12412 within three days from the date he/she completed all actions and input transactions.

  4. For further information, refer to the SLA online at SLAs under the heading Policy Procedures and Guidance.

Tax Exempt Government Entities (TE/GE) and Small Business/Self Employed (SB/SE) Service Level Agreement

  1. The purpose of the SLA is to identify a set of processing and customer service targets which SB/SE Operating Division and TE/GE Operating Division agree are an acceptable level of service for the term of the agreement.

  2. The three key services in an SLA :

    • Timely processing of submissions

    • Accurate processing of submissions

    • Striving for continuous improvement in processing of the submissions

EPMF Abbreviations and Acronyms

  1. This section lists and defines some of the acronyms and terms used in processing the TE/GE returns:

    Figure 21.5.11-29

    EPMF Abbreviations and Acronyms

    Abbreviation /Acronyms Explanation Abbreviation /Acronyms Explanation
    AC Action Code ICP Integrated Case Processing
    AD Administrator IDRS Integrated Data Retrieval System
    ADJ Adjustment IRC Internal Revenue Code
    ADP Automated Data Processing IRM Internal Revenue Manual
    AMS Account Management Services ISRP Integrated Submission and Remittance Processing
    AMT Amount ITIN Individual Taxpayer Identification Number
    ANF Account Number File KIF Key Index File
    AO Area Office MCC Martinsburg Computing Center
    BMF Business master file MFT Master File Tax Code
    BO Business Operational Data NC Name Control
    CAF Centralized Authorization File NMF Non MasterFile
    CCC Computer Condition Code NR No Reply
    CP Computer Paragraph PBGC Pension Benefit Guaranty Corporation
    CY Calendar Year PCF Plan Characteristic File
    DLN Document Locator Number PCCF Plan Case Control File
    DOC Document PDM Plan Data Module
    DOL Department of Labor PIA Principal Industry Activity Code
    DST Display Station Terminal POA Power of Attorney
    EACS EP/EO Application Control System POIF Plan/Organization Index File
    EACF EIN Assignment Control File PRP Problem Resolution Program

    Note:

    Now referred to as TAS

    EBSA Employee Benefits Security Administration PY Prior Year
    EC Error Code PYE Plan Year Ending
    EDS EP/EO Determination System PYM Prior Year Month
    EFAST ERISA - Filing Acceptance System RCC Return Condition Code
    EIF Entity Index File RCD Received Date
    EIN Employer Identification Number RDD Return Due Date
    EKIF EIN Key Index File RPC Return Processing Code
    ELF Electronic Filing SC Service Campus
    EM Employer/Sponsor SCCF Service Center Control File
    EPMF Employee Plans master file SCRS Service Center Replacement System
    ERAS EIN Research and Assignment System SD Source Document
    ERC Error Reason Code SFR Substitute for Return
    ERISA Employee Retirement Income Security Act TAS Taxpayer Advocate Service
    FLC File Location Code TC Transaction Code
    FOF Fact of Filing TE/GE Tax Exempt and Government Entities
    FY Fiscal Year TE Tax Examiner
    FYE Fiscal Year Ending TIF Taxpayer Information File
    FYM Fiscal Year Month TIN Taxpayer Identification Number
    GMF Generalized Mainline Framework TP Taxpayer
    GPP General Purpose Program TRS Transcript Research System
    GUF Generalized Unpostable Framework TXP Tax Period
    IC Input Cycle URC Unpostable Resolution Code

Area Office (AO)

  1. This section lists the Area Office (AO ) that process TE/GE returns and their numeric codes and geographic jurisdictions.

    Figure 21.5.11-30

    Area Office Geographic Jurisdictions

    Area Office Code States of Jurisdiction
    Northeast 01 Brooklyn (EP Area Manager)
    Brooklyn (EO Area Manager)
    Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island, Vermont
    Mid-Atlantic 02 Philadelphia (EP Area Manager)
    Baltimore (EO Area Manager)
    Pennsylvania, New Jersey, Maryland, Delaware, Virginia, North Carolina, South Carolina, District of Columbia
    Great Lakes 03 Chicago (EP Area Manager)
    Chicago (EO Area Manager)
    Ohio, Indiana, West Virginia, Kentucky, Illinois, Michigan, Wisconsin
    Gulf Coast 04 Dallas (EP Area Manager)
    Atlanta (EO Area Manager)
    Florida, Georgia, Alabama, Mississippi, Tennessee, Arkansas, Louisiana, Texas, Oklahoma
    Central Mountain 05 Denver (EP Area Manager)
    St. Paul (EO Area Manager)
    Minnesota, Iowa, Missouri, Kansas, Nebraska, North Dakota, South Dakota, Montana, Wyoming
    Pacific Coast 06 Los Angeles (EP Area Manager)
    Los Angeles (EO Area Manager)
    Washington, Oregon, Idaho, California, Alaska, Hawaii

Reference Chart for Form 5500 Series, Schedules and Attachments

  1. The following figure lists the schedules for Form 5500-EZ filings.

    Figure 21.5.11-31

    Form 5500 Series, Schedules and Attachments

    Schedule A Insurance Information
    Schedule C Service Provider Information
    Schedule D DFE/Participating Plan Information
    Schedule G Financial Transaction Schedules
    Schedule H Financial Information
    Schedule I Financial Information - Smart Plan
    Schedule MB Multi-employer Defined Benefit Plan and Certain Money Purchase Plan Actuarial Information
    Schedule R Retirement Plan Information
    Schedule SB Single-employer Defined Benefit Plan Actuarial Information
  2. The following figure provides the schedules for Form 5500-EZ filings.

    Figure 21.5.11-32

    Form 5500-EZ Schedules

    Schedule MB Multi-employer Defined Benefit Plan and Certain Money Purchase Plan Actuarial Information
    Schedule SB Single-employer Defined Benefit Plan Actuarial Information
  3. Single-employer defined benefit pension plans using the Form 5500-SF must also file the Schedule SB, Single-employer Defined Benefit Plan Actuarial Information, and its required attachments. Money purchase plans amortizing a funding waiver using the form 5500–SF must also file the Schedule MB, Multi-employer Defined Benefit Plan and Certain Money Purchase Plan Actuarial Information and its required attachments. No other schedules or attachments have to be filed with the Form 5500-SF.